Friday, October 26, 2012

Chilling Reality: Why Those Voting Early Get Greater Proportional Representation Than Those Who Don’t

It’s a chilling reality but do you know why, when the votes are finally counted, those who vote early will wind up being proportionately better represented with a greater number of their votes counted than those who wait for Election Day? . . . 

. . . . Because, if you wait till Election Day to vote you might die first.  Or you might just get sick, enter into a coma, or otherwise somehow lose competence to make it to the polls to cast your vote.  Or you could be kidnapped!  Meanwhile, although a certain percentage of those who vote early will likewise die before Election Day their votes are still going to count.

Now, technically, (here’s a quibble) if you vote early and then die before Election Day your vote isn’t supposed to count.  In theory it should be traced and extracted from the amassed vote totals of which it will have by then become a part, but, as a practical matter, that isn’t going to happen.  That’s what this article says and I’ll concur in its conclusion without researching it further: Don't Worry, This World War II Veteran's Vote Will Be Counted, Alexander Abad-Santos, Oct 22, 2012.                

What about your vote if you lose mental competence or are in a coma?  Do those votes wind up being votes that, as a practical matter, will still count even if they perhaps aren't supposed to?

Oh, they’ll probably be counted too but whether people think they should count under applicable voting rules is complicated: You probably don’t want to get into trying to sort out the answer. . .

. . . It’ll depend, partly, on what are the laws of whatever one of the fifty states in the union you are in.  You get sent to an insane asylum after voting early?  A court orders that a guardian must take charge of you?  It might be that your vote is still supposed to count, at least unless further steps have been taken to classify your vote as an incompetent one.

Here’s a peculiar sort of topsy-turvy, turnaround state of affairs when it comes to voting.  Normally, if you become incompetent, your ability to do anything legally disappears unless you have executed and are acting through a document (everybody ought to know about and consider using) called a durable power of attorney- It’s something you sign so that someone can still effectuate your legal wishes after you’ve become non compos mentis (not sound of mind).  Voting?  Voting in a public election is practically the only legal act that kind of power of attorney can’t be used to accomplish if you’ve gone, proverbially, out to lunch.    Conversely, though, that early vote of yours?: It stands, perhaps singularly, as maybe the only future legal act that is still supposed to be recognized as having legal validity even though you’ve lost your mental faculties!

You go into a coma?  Well, whether your vote ought to count might depend on whether you come out of that coma later.  If you come out of the coma then your vote is probably supposed to be counted no matter what.  Going into a coma and not coming out might be something different.  That's technically speaking, although as a practical matter, your vote is probably still going to stay amongst the counted anyway.

As for being kidnapped?: Your early vote should count no matter what.  And remember, kidnapping might include that kind of metaphorical kidnapping that occurs when, on the day of the election, your boss tells you that you have to work extra shifts, right through all the scheduled voting hours.

Does all the nitpicking associated with all this meticulous legal parsing seem just a tad ridiculous?   Yes, perhaps it does.  After all, even if there are some votes that, if you scrutinize them, are perhaps not supposed to count for reasons that may apply and vary from state to state, are there really that many people total who are going to die, get declared incompetent or go into a coma between the particular day they vote early and that national election day now looming before us?*  As an honestly credible concern would the small number of such individuals be likely to have any truly significant effect on the outcome of an election?  Even if it were the case, how unfair is it that these dedicated early voters are able to surmount the vagaries of fate to cross the quadrennial finish line to have their vote count one last time?
(* For the die hards of death tracking who want to do some rough calculations: Say that 2,420,000 Americans die every year.  Say that, of this number, maybe some 93,000 die during the average period between the casting of an early vote and Election Day.  Not all of them are eligible voters or vote to begin with.  The current U.S. population is 311,800,000. Last presidential election, with a record turnout, 131 million people voted.  Only about 60% of eligible voters vote.  This year it is estimated that 40% of those voting will vote early.  So maybe 15,500 or so voters might die before the election after casting an early ballot.)
Think the above is ridiculous?

The horror of having the votes of dead voters improperly count just discussed is nothing compared to the ridiculousness of what has been going on in Texas this election in the name of of not letting dead voters improperly vote. . .

Mid-September, National Public Radio ran a superb story on the political shenanigans going on in Texas that commenced by making brilliant use of an audio clip from the film, “The Sixth Sense” (It is pretty much the same audio used as audio for the film’s trailer): Many Texans Bereaved Over 'Dead' Voter Purge, by Wade Goodwyn September 16, 2012.

I include the movie’s trailer here in this post so you can click on it just in case you don’t find this post spooky enough all on its very own.

The NPR story (click here to listen) begins with the young actor from the 1999 film, Haley Joel Osment saying:
I see dead people. Walking around like regular people. They don't know they're dead.    
In the film trailer Osment also says:
They’re everywhere.
The NPR story is basically about how, for political reasons, Republican Texas Secretary of State Esperanza "Hope" Andrade decided she could, with a similar paranormal paranoia, see dead people everywhere, walking around like regular people who didn’t know they were dead.  That enabled her to purge the Texas voting rolls of likely Democratic voters.

Hope Andrede notified 80,000 individuals* that they were deceased and were therefore being removed from the voting rolls.  To do so she used information that the Social Security administration warned the state of Texas it shouldn't rely on.  According to the NPR story a quick check by one of the local tax assessor-collectors led him to conclude “that there was a big probability that even a majority of the names on the list were people that were still alive.”
(*  Note for the die-hard death trackers: This huge 80,000 number is for just one state, not a nationwide figure.)
The NPR story then chronicles how these “dead people” (in one case a 52-year-old African-American woman and her 80-year-old father both got letters from Hope saying they were dead) have to spend hours on the phone, to no avail, trying to reach the government to say they are not dead.

You may want to tuck this article away and pull it out to give a livening-up “Boo” to a few a friends at Halloween which, like the election, is coming in just a few days.

The point to be most conscious of here is that the vast amount of voter suppression going on this year is not about getting things technically right and preventing from being counted the almost nonexistent number of votes that are cast improperly.  We are at risk for virtually no documented instances of voter fraud.  The onslaught against voting rights has not been about striking a balance in terms of what makes sense to ensure that the electorate is properly and accurately represented : Voter suppression is being pursued for the insidious purpose of intimidating and preventing those who are entitled to vote from doing so, and as many of them as possible.   The scary thing is that these baleful intentions could wind up steering the results of the election.

One last thing: If you do go and vote early it will give you the chance to find out if someone has been intentionally exaggerating reports your death.  That way can get started complaining early too.  (And just so you know, if you find yourself facing that plight you can still exercise your right to vote, so insist on it!)

Tuesday, October 23, 2012

Did Romney Access His Credentials As Mormon Bishop To Answer Gun Control Question In Second Presidential Debate?

Romney answering question about controlling AK-47 assault weapons during second presidential debate- Was his answer "heaven-sent"?
There was a moment in the second presidential debate that struck me as most odd.  I think I have finally managed to explain it by referring back to the time that Romney served as a Mormon Bishop. . .

. . .  How do we get from here to there?

Well that was more or less my question when I was listening to the debate: What kind of leap was Romney making when he answered an audience member’s question about gun control?

The Gun Control Question

Nina Gonzales asked the gun control question first of President Obama, whose turn it was to take the next question.  When Obama finished answering moderator Candy Crowley restated it to put it before Mr. Romney.

Ms. Gonzales’ question and Ms. Crowley restatement were as follows:
Ms. Gonzales: President Obama, during the Democratic National Convention in 2008, you stated you wanted to keep AK-47s out of the hands of criminals. What has your administration done or plan to do to limit the availability of assault weapons?

Ms. Crowley: Governor Romney, the question is about assault weapons, AK-47s.
The Answer?

Now admittedly we’ve had a number of issues that people would just as soon dance around or avoid entirely in this election if they can: Global weather change, Guantanamo detentions, drug legalization (See Brian McFadden’s October 21, 2012 “The Strip”).  Given the strength and inflexibility of the gun lobby, gun control is no doubt another of these.

But where did Romney go in his dance?  He went to the importance of two-parent households and not having babies before getting married!  (Presumably that translates into not having sex or only having very careful sex before getting married given Romney’s stance against a woman's free choice when it comes to abortion rights.  Presumably it also means government encouragement of the forgoing, given that Romney was answering the gun control question in the context of explaining why he should be president.)

Government encouragement of two-parent households to limit the availability of AK-47 assault weapons?

Obama danced a little in his response but not that much.  He referred implicitly to being governed by the Supreme Court’s recent rulings by saying that: “we're a nation that believes in the Second Amendment.”   That’s pretty direct.

Romney actually cited back to part of Obama’s response when he went off on his tangent about having babies when you are not married.  Indeed, Obama had spoken of having “a broader conversation” about reducing impulses to violence in the culture (and he even mentioned “faith groups” in this regard) even as he spoke about taking guns out of the hands of criminals and the mentally ill:
And so what I'm trying to do is to get a broader conversation about how do we reduce the violence generally. Part of it is seeing if we can get an assault weapons ban reintroduced, but part of it is also looking at other sources of the violence, because frankly, in my hometown of Chicago, there's an awful lot of violence, and they're not using AK-47s, they're using cheap handguns.

And so what can we do to intervene to make sure that young people have opportunity, that our schools are working, that if there's violence on the streets, that working with faith groups and law enforcement, we can catch it before it gets out of control?

And so what I want is a — is a comprehensive strategy. Part of it is seeing if we can get automatic weapons that kill folks in amazing numbers out of the hands of criminals and the mentally ill. But part of it is also going deeper and seeing if we can get into these communities and making sure we catch violent impulses before they occur.
But consider where Romney went with it when invited to participate in that broader question.

First he referred back to President Obama’s concept of being attuned to the culture of communities to catch violent impulses before they manifest:
What I believe is we have to do as the president mentioned towards the end of his remarks there, which is to make enormous efforts to enforce the gun laws that we have and to change the culture of violence we have. And you ask, how are we going to do that? And there are a number of things.
The “number of things”?

Obama had mentioned (in conjunction with the need for opportunity) the nation's schools should be working and Romney quickly endorsed having good schools (We were able to drive our schools to be number one in the nation in my state” - Fact checking: Romney didn't do that `driving') saying:
    . .  we'll give people the — the hope and opportunity they deserve, and perhaps less violence from that. 
But it was where Romney went quickly after that and the depth and amount of time he spent with the idea indicated it might all have been heartfelt even as he tried to cover multiple bases (two-parent households are “not always possible):
But let me mention another thing, and that is parents. We need moms and dads helping raise kids. Wherever possible, the — the benefit of having two parents in the home — and that's not always possible. A lot of great single moms, single dads. But gosh, to tell our kids that before they have babies, they ought to think about getting married to someone — that's a great idea because if there's a two-parent family, the prospect of living in poverty goes down dramatically. The opportunities that the child will — will be able to achieve increase dramatically.

So we can make changes in the way our culture works to help bring people away from violence and give them opportunity and bring them in the American system.
Where did this come from?  Obama wants to pay attention to how people are behaving in their “communities” but Romney wants to have a conversation with us all about having babies and what kind of families we are forming that . .  (is he really saying this?). .  may or may not (depending on the number of parents?) be part of the “American system”?

A Heaven-Sent Answer?

I believe I found my answer the other day.  I was about halfway through watching PBS Frontline’s “The Choice 2012,” a two hour documentary (Frontline does one every four years) interweaving the biographies of the two presidential candidates.

What I believe is my answer came when the documentary covered Romeny’s being ordained as a Mormon bishop.  (He served four years.) Here is what I heard:
NARRATOR: He would spend 20 to 30 hours each week helping other Mormons handle their most personal problems;— debt, sickness, unwanted pregnancies, and failing marriages.

CLAYTON CHRISTENSEN, [Romney's] Friend: The responsibility to helping them resolve their difficulties and recommit to each other falls on the shoulders of the bishop.

NARRATOR: At first, Bishop Romney was viewed by some as inflexible, what Mormons call an “iron rodder.”

SCOTT HELMAN [The Boston Globe- Co-Author, The Real Romney]: Some people describe him as being very much out of that hidebound tradition, where you know, he’s telling women that they cannot have an abortion. He’s telling single women to give up their children for adoption because the Mormon church does not encourage single parenthood, that he’s resistant to calls for changes within the church for more liberal policies, especially towards women.
The documentary suggested that Romney, confronted with real world family problems ultimately “thawed a bit” but that idea that “single women” should “give up their children for adoption because the Mormon church does not encourage single parenthood” sounds an awful like the idea Romney accessed on the stage of the second presidential debate when he told the nation how we should address the availability of AK-47 assault weapons on the streets.  I am not comfortable with the “broader conversations” Romney seems a little too eager to have.

Investors Discover That Fracking Costs Exceed (In The Not-So-Obvious Way) Expected Financial Benefits: What The New York Times Fails To Say

The New York Times Sunday Business section this week ran an article about the trouncing that investors in hydraulic fracturing companies are suffering.  A subhead to the print version of the article calls it a “gut punch to investors.”  It’s happening because the cost of fracking is exceeding the value of what’s being produced.

Fracking Cost Exceeds Benefit

Economists and environmentalists might say: That’s news? . .   We always knew that fracking was so destructive to the public's assets and environment that it wasn’t worth the cost.  But the news the Times story is delivering is different: Fracking investors are losing their shirt because the fracking boom is so much of a boom that it's going bust.  As the Times puts it the gas rush has:
    . . .been a money loser so far for many of the gas exploration companies and their tens of thousands of investors.
    The drillers punched so many holes and extracted so much gas through hydraulic fracturing that they have driven the price of natural gas to near-record lows. And because of the intricate financial deals and leasing arrangements that many of them struck during the boom, they were unable to pull their foot off the accelerator fast enough to avoid a crash in the price of natural gas, which is down more than 60 percent since the summer of 2008.
(See: After the Boom in Natural Gas, by Clifford Krauss and Eric Lipton, October 20, 2012.)

The most interesting thing about the Times article is likely what was left out, the multiple implications it didn’t address.  We’ll get to all that in moment.  First, what the Times did cover.

Fracking Companies Headed Toward Bankruptcies

Although the Times doesn’t use the term it looks like “bankruptcies” are, no doubt, in the future for some of the companies.  That, at least, is what I would glean from information supplied like the following:
    •    Rex W. Tillerson, the chief executive of Exxon Mobil, is quoted in the article saying:  “We are all losing our shirts today,” Mr. Tillerson said. “We’re making no money. It’s all in the red.”

    •    Now the gas companies are committed to spending far more to produce gas than they can earn selling it.

    •    We learn of situations where an  “agreement, negotiated by Goldman Sachs, came with some important strings attached: Exco [Resources] had to keep all 22 rigs drilling for gas, even as the price was dropping.” so that drilling wells continues “even if [Exco] now insisted that it made no economic sense.”

    •    Aubrey K. McClendon, a chief executive of Chesapeake Energy, one of the industry's really big companies is quoted as saying, “At least half and probably two-thirds or three-quarters of our gas drilling is what I would call involuntary.”

Picking on T. Boone Pickens

In this vein, the Times story tells a supporting anecdote about that Exco Resources contract that features Texas oilman, T. Boone Pickens.  I’ve previously quarreled with Mr. Pickens for misrepresenting that lots of fracking has been done before and that what is suddenly massively underway in this country isn’t a brand new technology, the likes of which we haven’t seen before.  In the Times anecdote Mr. Pickens learns that things are shaping up different enough so that he is encountering surprises himself:
    “Quit drilling,” T. Boone Pickens, the Texas oilman, barked to his fellow board members at Exco Resources, . . . .  “Shut her down.”

    * * * *

    There was only one problem: under the contracts that Exco signed, it couldn’t stop drilling.

    * * * *

    Mr. Pickens was furious. “We are stupid to drill these wells,” he said in a recent interview.
In unfolding the anecdote the Times works in that in the late 1980s Mr. Pickens lost his company, Mesa Inc., “when drooping gas prices hurt its ability to repay debts and pay dividends.”

Wall Street Bankers Behaving Badly Again

The article portrays the hammered investors as being the victims of perhaps unscrupulous investment bankers likening the investors’ situation with the “recent credit bubble,” saying:
the boom and bust in gas were driven in large part by tens of billions of dollars in creative financing engineered by investment banks like Goldman Sachs, Barclays* and Jefferies & Company.
(* Barclays is the British bank for which two Brooklyn subway hubs were recently renamed by the city MTA, together with a sports arena that was deeply subsidized by New Yorkers with some help from federal taxpayers as well.)

According to the Times:
After the financial crisis, the natural gas rush was one of the few major profit centers for Wall Street deal makers, who found willing takers among energy companies and foreign financial investors.
Remember how in the aftermath of the financial crisis Goldman Sachs was excoriated for and then avoided prosecution by paying a record $550 million fine to the SEC (many argued it was too low) for playing both sides of the housing mortgage market, promoting housing bonds while at the same time betting that money could be better made from the coming downturn in that market?  The Times has a gas drilling industry-based version of this investment banker story, once again involving Goldman Sachs selling, in conjunction with Jefferies & Company, a debt position in one of these fracking companies while the bankers are at the same time betting on a market decline.

Goldman gets passing mention while the Times focuses in on a Jefferies & Company banker, Ralph Eads III, whom it describes as “a pitch artist” of “unrestrained enthusiasm” and probably a bit of a manipulator as well.  (The Times recounts that Eads was involved with what regulators charged was the creation of “an artificial gas shortage in California” in 2000; Eads’ counter-characterization was that the company he worked for had just come up with “creative financial transactions.”)

Selling a Toxic Product In Which You Don’t Believe

Focusing in on Eads to build its story to a very big extent the Times says that Eads participated in structuring a deal that personally benefitted Eads and his colleagues “far more than the people writing the big checks.”  Giving examples of Eads' hard sell to investors the Times reports he acknowledges their “bluster” but invokes “caveat emptor” (buyer beware) in saying that his investors should be exercising good judgment in deciding whether to invest notwithstanding that a managing director at Oppenheimer & Company describes Mr. Eads as being like a “bartender serving drinks for people who can’t handle it.”

More important, Eads was simultaneously playing the other side:
    Just as in the earlier real estate bubble, the main players publicly predicted success even as, privately, their doubts were growing, court documents show.

    * * * *

    Mr. Eads appears to have fared better. He had seen the coming crash, and, as any master salesman would, found a way to play both sides. He continued to persuade new investors of the great potential in shale while telling his longtime clients to cash out.

    * * * *

    Mr. Eads then helped arrange what will go down as one of the great early paydays of the shale revolution: the 2010 sale of East Resources, which Mr. Pegula had started with $7,500 borrowed from family and friends, to Royal Dutch Shell for $4.7 billion.

But Eads and Jefferies & Company, together with Goldman, were directing investor debt into the troubled Chesapeake Energy.

Bad News Implications Entirely Sidestepped By The Times

The Times article has a lot more information about the apparent targeted swindling of gas industry investors and it is all worth a careful read.  Here are pertinent observations missing from the Times article, not even hinted at in its content:
    1.)  While things are now this bad in terms of the cost equation for the investors, the fracking investment these investors made (and the industry as a whole) were never initially required to internalize all the negative costs to society of hydraulic fracturing.

    2.)  Bankruptcies of these companies are going to make it a problem when society then looks to defunct companies to:
        a.) clean up after themselves,
        b.) maintain wells and equipment in ways that prevents worse damage, and
        c.) pay damages to compensate those suffering from injury (that includes those companies who have been paying to truck in fresh water for people who can no longer drink from their wells.)
    3.)  The companies may still in the future be required to internalize some societal costs they haven't yet been required to internalize.  That would make their situation for investors far worse.

    4.)  Companies that have leveraged themselves by borrowing against assets they theoretically have in the ground will be vulnerable to a bursting bubble on this basis.  (A bigger bust is coming when the industry realizes that eventually it will be barred from extracting most of what the industry currently counts as in-the-ground fossil fuel assets.  The Times article ends with Mr. Eads making statements exactly contrary to this reality: “These shale assets are forever . . .They are going to produce for a hundred years.”)

    5.)  Meanwhile the costs of competing technologies are dropping although the gas glut has interfered with their development to an extent.
Collateral Damage In Other Industries?

If companies in competing industries, for example the solar power industry, were facing that same kind of shakeout while facing an unexpected glut of product, some solar companies going bankrupt and the more efficient ones rising to the top, there wouldn't be so much collateral damage accompanying that shakeout.. .

 . . . Hey, wait a minute: The solar industry is experiencing these kinds of problems at the moment!  My wife has a cousin who works with an electrical company that has been developing solar technology.  Right now they have shelved those research and development efforts.  The reason: The tremendous drop in cost of gas.  Similarly the coal industry, not an industry of the future since it is also fossil fuel, is going through shut-downs.

Those working hard to get out information about the hazards and destruction that fracking entails are, no doubt, going to consider, with some eagerness, promulgating the New York Times Business section story for its cautionary value in discouraging potential investment in fracking.  A reason they might have some reluctance to do that is because the story commences with a long industry-friendly reiteration of the industry narrative that the “gas rush has benefited most Americans.”  That is not true: You can’t claim benefit from fracking when you consider its long-term costs and detriment.  (The last National Notice article summarizing the detriments to take into account was:  Monday, October 15, 2012, Do They Really Think People Just Don’t Know What `Fungibility’ Is?: A Good Question To Ask As The Fracking Industry Tries To Pull Another Fast One.)

Accelerating Crash-Destined Vehicles: A Repeating Story

The Times metaphor about the industry being “unable to pull their foot off the accelerator” to avoid “a crash” (it also alternatively refers to “a train without brakes”) happens to dovetail with what I have said of the industry, that it is engaged in:
a premeditated “hit and run” strategy, looking to do as much as they quickly can while knowing the damage it will inflict, trying to do it before people realize how dangerous and destructive the new technology is, how devastating to the environment and before the lower and lowering cost of alternatives like solar are recognized to have overtaken and relegated the fracking industry to a curious antiquity.
The Times story is evidence that, maybe not so surprisingly, the industry’s bankers enriched themselves with this same quick hit strategy to take advantage of investors.

A Feint and Faint Find of Collateral Damage

Aside from the damage suffered by the investors as a result of such unethical treatment, does the Times acknowledge collateral damage anywhere else?  There are only these two paragraphs at the end of the article and they are insufficient:
    The bust has certainly hit the Haynesville (sic) [A town in Louisiana where Chesapeake Energy was drilling] hard. Some local landowners, having spent their initial lease bonuses, are now deeply in debt. Local restaurants and other businesses are suffering steep losses now that so many drillers have left town.

    “At this point we’re struggling,” said Shelby Spurlock, co-owner of Cafe 171 in the town of Mansfield. The restaurant is decorated with wall collages of drill worker uniforms from companies that are leaving the area. Once open from 4 a.m. to 10 p.m. and employing four servers, the restaurant has cut its hours and is down to two servers. “Our very existence is in danger,” she sighed.
Actually, with fracking and global weather change from irresponsible fossil fuel exploitation it's the entire country and the entire world whose very existence is threatened.

Thursday, October 18, 2012

How Big A Lie Did Mitt Romney Tell When He Said His Federal Taxes Were Never Less Than Thirteen Percent Of His Income? (And Why It Affects The Economy)

Romney during second Presidential debate this week where he said he talked about eliminating capital gains taxes
Mitt Romney misled us when he told us that federal taxes on his very substantial income were always at least thirteen percent.   Knowing how very little Romney is really required to pay in taxes matters a lot.  It matters a lot because it is creating a drag on the economy.

As of now, Mitt Romney has still released only two of his tax returns.  For the longest time he had released only one tax return.  That was back when he was assuring us that, not to worry, in the absence of releasing more information he could assure us that his tax liability was always at least thirteen percent.  (See: Romney Says He Paid at Least 13% in Income Taxes, by Michael D. Shear, August 16, 2012.)

In September, Romney finally released his 2011 tax returns.  It turned out that the federal taxes he owed for his adjusted gross income of about $13.7 million was actually about only ten percent. That’s far less than that thirteen percent figure he’s been pushing out to the public with assurances back in August.

So that it didn’t appear that Romney had been too outrageously inaccurate or misleading Romney had a fix-it when he finally released this tax return: He consciously elected to pay more taxes than he had to:
Mr. Romney has said that he has paid at least 13 percent in federal income taxes in each of the last 10 years.

In order for that claim to be true in 2011, Mr. Romney had to voluntarily take a smaller deduction than he was entitled to for his charitable deductions, his advisers said Friday.
(See: September 21, 2012, Romney Releases 2011 Tax Returns, By Michael D. Shear.)

Romney overpaid his taxes by enough that he actually paid about fourteen percent in taxes.

The fix-it, as after-the-fact fix-its go, is pretty inadequate in a couple of ways. 

The first thing that makes this fix-it inadequate is that Romney was on record saying he wouldn’t be qualified to be president if he paid more taxes than he actually had to.  He said that just last July when ABC’s David Muir asked him it in an interview whether he had ever paid taxes lower than 13.9%.  (If you are wondering why Romney paid fourteen percent when he overpaid his taxes, rather than just enough to get thirteen percent, the reason may be that Muir asked him about this 13.9% figure.)

Romney responded to Muir as follows:
My view is that I have paid all the taxes required by law [. . . . .]  I don’t pay more than are legally due. And frankly if I had paid more than are legally due I don’t think I’d be qualified to become president.  I think people would want me to follow the law and pay only what . .  Ah. . the tax code requires.
You can hear an audio clip* of him saying exactly this in a Brian Lehrer show segment the following Monday. .  Romney released his tax returns just before the weekend on a Friday. . (starting at 3:52).  You can click to hear it below in the embedded audio.

You can also watch the ABC Muir interview itself or read the transcript.*
(* Here is an issue of exactitude that will be of geeky interest to those who wonkily track how the media presents stories: If you look at the transcript of the interview you can see that the audio of the Brian Lehrer show clip, a direct lift from the ABC video, and the ABC video itself are undetectably edited- ABC slid in a cut to a photo to hide the cut, but the edited deletion from what Romney said is nothing that will help or especially hurt him.  It goes in where I inserted the bracketed ellipses in the quote above: “From time to time I've been audited as happens I think to other citizens as well and the accounting firm which prepares my taxes has done a very thorough and complete job paying taxes as legally due.”)
The second thing that makes Romney’s coy ploy of this after-the-fact fix-it inadequate is that overpaying one’s federal taxes does nothing in terms of locking in his tax liability at that higher rate.  In its first New York Times report (not the second) about Romney finally releasing his 2011 tax return the paper hinted at this when it suggested that it was possible Romney “could still deduct the unclaimed amount of his charitable donations in future tax years.”

This deserves to be truly nailed down!: Overpaying taxes doesn’t establish (or `fix') tax liability.  It’s instead like socking your money away for future withdrawal from the bank.  Yep!

To confirm this I called the firm of Reiner and Reiner, Wall Street lawyers I like to consult for tax advice who also prepare tax returns.  I was assured that anytime Mr. Romney wants, after the election or otherwise, all he has to do is file an amended tax return and he can then claim the charitable deductions he didn’t recently claim. VoilĂ !  Mr. Romney will then have paid only the minimum ten percent in income taxes he is legally obligated to pay.  He can do this for up to three years after filing and thereby no longer be unqualified (by his own standards) to be president by paying more taxes than are legally due.

Do people, politicians and others often go around amending their income tax returns, even doing so when getting what they have filed correct is important for political purposes?  You bet they do!  In one of the same articles reporting on Romney’s final release of his tax returns we learned that his vice-presidential running mate Paul Ryan filed an amended return to deal with the fact that he and his wife failed/forgot to report $61,122 of their income for 2011:
In an amended return also released Friday, Representative Paul D. Ryan, Mr. Romney's running mate, disclosed that he and his wife had initially failed to report $61,122 in income from 2011. He said the failure was inadvertent. The change raised their total income to $323,416 and increased their taxes by $19,917 to $64,674, or 20 percent of adjusted gross income.
(See: Romney Reveals He Paid 14% Rate in 2011 Tax Return, by Nicholas Confessore and David Kocieniewski, September 21, 2012.)

It’s been suggested that the Democrats haven’t wanted to drill down on the fact that Romney’s tax liability was actually only ten percent in 2011 because it involves the difficult issue of Mr. Romney’s making what qualifies as “charitable” deductions.  That gets into a whole other kettle of fish when it comes to the vast wealth that only a few people control in this nation.  There are those like New York Mayor Michael Bloomberg or real estate developer/public subsidy collector Bruce Ratner who direct huge amounts of their “charitable” and deductible "giving," wielding it for political and personal gain.

When it comes to having to pay so very little income tax, the fascinating thing is that payment of taxes is an element of the disdain that Romeny expressed in his infamous 47% percent remark about all those Americans Romeny says “believe that they are victims” and don’t “take personal responsibility and care for their lives,” is that, in Romeny’s words:
These are people who pay no income tax. Forty-seven percent of Americans pay no income tax.
A lot has been written after Romney’s remarks about the 47% of Americans who don’t pay taxes (actually 46.4%), about how that includes young people and students, elderly collecting on the Social Security benefits they paid for, active service men and women, Americans paying payroll and Social Security taxes at a higher rate than those with higher incomes, and as Jon Stewart made fun of on the Daily Show would have included Romney's own parents when they needed to take advantage of public assistance.  (See: The 47 Percent, In One Graphic, by Jacob Goldstein, September 18, 2012, Who Are the 47 Percent? 7 Facts about the Americans Mitt Romney Attacked, by Kevin Fallon, Sep 18, 2012 and Fact-checking Romney's "47 percent" comment, by Lucy Madison, CBS News/ September 18, 2012.)

Romney’s ten percent tax liability isn’t quite down to the level of having to pay no federal taxes at all but there are those among the wealthy, those Romney might himself have been addressing at the political fund raiser where he made his 47% remark, who actually are among the 47% who don’t pay taxes.  Back when Romney hadn't yet released his 2011 tax returns the New York Times filled the void with a story about the sort of things that tax returns of the rich can reveal.  It contained the following information “never before disclosed” by the IRS (emphasis supplied):
It so happens that this summer the Internal Revenue Service released data from the 400 individual income tax returns reporting the highest adjusted gross income. This elite ultrarich group earned on average $202 million in 2009, the latest year available. And buried in the data is the startling disclosure that six of the 400 paid no federal income tax.
(See: Common Sense, In Superrich, Clues to What Might Be in Romney’s Returns, by James B. Stewart, August 10, 2012.)

Six of those with highest adjusted gross income in the nation paid no federal income tax?   And where between no federal income tax and Romney’s ten percent tax liability do the rest of those with highest incomes in the nation stand in terms of the taxes they are required to pay?

During this week’s presidential debate Romney offered what was, no doubt, intended to be an obfuscating figure in his regard, that:
The top 5 percent of taxpayers . . . pay 60 percent of the income tax the nation collects.
The more correct figure is actually apparently 57 percent (not 60 percent), but to the extent that the figure is true it says more about the way that income in this country has been increasingly skewed to go more to the already wealthy and more advantaged, those who even paying such lower such rates, still wind up picking up that much of the nation’s taxes.  It also shows why, as incomes increasing skew to go to a small minority of the population, it is so important that that population pay their fair share, rather than the lower preferential rates Romney champions.

One reason Romney pays lower taxes than everyone else is because so much of Romney’s income is in investments and capital gains being taxed at a preferential lower rate than what other Americans must pay on their earned income.  During the debate Romney tried to pull another fast one: That because he wanted “middle-income taxpayers to have lower taxes” he had a plan where they “no longer will pay any tax on interest, dividends or capital gains.”  (One wonders: When Romney says he wants to benefit a“crushed” “middle class of America,” what percent of that group does he consider to be included in the 47% he disdains?)

When implemented Romney’s capital gains tax elimination plan will probably involve further tax cuts for himself and the similarly wealthy but CBS notes (providing a chart): That “most middle class taxpayers are not currently paying a ton of tax in these [capital gains, etc.] areas.”

Why are all the preferential tax treatments that skew more wealth to the wealthy and have them shoulder less than their fair share a very important concern?  It not only makes the rest of us poorer; it is also bad for the economy.  Here is caution about the United States from the International Monetary Fund which normally might be concerning itself instead with travesties of third world economies in the countries of continents like South America:
“Growth becomes more fragile” in countries with high levels of inequality like the United States, said Jonathan D. Ostry of the International Monetary Fund, whose research suggests that the widening disparity since the 1980s might shorten the nation’s economic expansions by as much as a third.

Reducing inequality and bolstering growth, in the long run, might be “two sides of the same coin,” research published last year by the I.M.F. concluded.

    * * * *

The I.M.F. has cautioned the United States, too. “Some dismiss inequality and focus instead on overall growth — arguing, in effect, that a rising tide lifts all boats,” a commentary by fund economists said. “When a handful of yachts become ocean liners while the rest remain lowly canoes, something is seriously amiss.”
(See: Income Inequality May Take Toll on Growth, by Annie Lowrey, October 16, 2012.)

Tuesday, October 16, 2012

News Of Two Reversing Trends Reminds Us The Rich Get Richer And The Rest Of The Nation, Working Harder, Dies Earlier

In an earlier National Notice article I observed two challenges stressing the Social Security system that cried out to be paired:
    •    Because the nation’s wealth and income are increasingly skewed, going more to those who are already wealthier, less money is being paid into the Social Security system because the wealthier, to whom that income is being redirected, pay proportionately less of their income into the Social Security System, and

    •    The wealthiest Americans are costing that system more, and benefitting more from it than the rest of us, because they are living longer than other Americans.
(See: Friday, April 29, 2011, Social Security Inequation: This is Rich, Living Longer While Everyone Else Enjoys It Less; Putting Two Together.)

I recently came across two more news stories, both about the reversal of what were long-term historic trends, that both appear to dovetail with and reinforce the observed stressors to the system mentioned above:
    •    The shortening workday gets longer again.  In the 1960s the length of the average workday had been shrinking consistently for so many years running (for 70 or 80 years, since the late 1800s) that a three-hour work day, predicated by John Maynard Keynes might arrive by about the year 2030.   But the trend reversed and our workdays have, instead, gotten longer again.  (See: As Jetsons turn 50, have their predictions held up? by Andrew Parsons, Marketplace for Friday, September 21, 2012.)

    •    Life expectancy for the less advantaged, once lengthening, is now growing shorter again.  According to a recent article in the New York Times: “For generations of Americans, it was a given that children would live longer than their parents. But there is now mounting evidence that this enduring trend has reversed itself for the country’s least-educated whites, an increasingly troubled group whose life expectancy has fallen by four years since 1990.”  (See: Life Spans Shrink for Least-Educated Whites in the U.S., by Sabrina Tavernise, September 20, 2012.)
It is hardly surprising to think that if the less advantaged are having to work harder at longer days they might be living shorter lives, thus increasing the already existing difference in life spans between the well-to-do and the less advantaged.

As for the Times article reporting on diminished life spans, the sharp-eyed and/or hard-hearted reader might point out that the article’s main focus is on whites, particularly white women, who have not obtained high school diplomas: It is not, per se, about those with lower incomes.  It is also possible to point out, quite rightly, that those without high school diplomas for which there has been the sharpest reversal and decline in life expectancy is a shrinking group, now “about 12 percent of the population, down from about 22 percent in 1990.”  So it could be argued that the statistics mean that because the advantage of a high school diploma is now more readily obtainable (if it is, as opposed to just more necessary) those who don’t obtain a high school diploma represent a culling down to a more hard core group with more serious problems and that the now shortening life spans of the group flows from that reality . . .

. . .  But that would be passing over the news in that article that the relative live expectancy of Americans overall (while going up for the wealthy) is declining overall relative to other nations, particularly for women:
In 2010, American women fell to 41st place, down from 14th place in 1985, in the United Nations rankings. Among developed countries, American women sank from the middle of the pack in 1970 to last place in 2010, according to the Human Mortality Database.
Now why is the workday lengthening so that we are working harder, perhaps to the detriment of our health in a way that could explain some of the shortening life expectancy above?   According, to the Marketplace story that reported the reversal of trends that has resulted in the lengthening our workdays, we’re actually  “still getting more productive” (albeit not quite as fast as before) “but the benefits from our productivity also go elsewhere now -- like the income gap.” 

According to Gary Burtless, an economist at the Brookings Institution, interviewed for the Marketplace story:
If the people at the top are getting more, there’’s a smaller percentage left over for workers in the middle and at the bottom.
What accounts for a world where the extra benefit from increased productively on the part of workers is squeezed out so that it only enriches those at the top of the income ladder rather than increasing salaries or reducing the workdays for those who are more productive?  Perhaps it’s a world where firms like Bain Capital (where Mitt Romney made his fortune) are poised and always ready to arrive on the scene to ensure that this is exactly what happens.

Monday, October 15, 2012

Do They Really Think People Just Don’t Know What `Fungibility’ Is?: A Good Question To Ask As The Fracking Industry Tries To Pull Another Fast One

Above, Pennsylvania’s Mansfield University– image from its website–the college on it its 175-acre campus is one of the state colleges recently deprived of funding, whose possible future actions pose a concern.
Last Friday, American Public Media’s Marketplace program presented the information, in a story a story about the funding of state colleges, that the state of Pennsylvania had made a decision to cut the budget for 14 schools in the state System of Higher Education by 18 percent. 

We may infer from this that political officials in the state of Pennsylvania apparently made a considered evaluation that, balancing out relative needs and priorities, the state money it was devoting to higher education would best be reallocated to other state needs.  Although that was key to the story reported, the story was, on its surface, about something else: A new law in that state of Pennsylvania nominally declaring that royalties from hydrofracking on state campuses, supposedly 50% of such royalties, money that would have gone to “state coffers,” be redirected to the colleges.  For the redirection to occur, the colleges have to permit hydrofracking on their campuses.  (See: Pennsylvania allows fracking on public college campuses, by Eve Troeh, Marketplace for Friday, October, 12, 2012.)

The Vice Chancellor of the state education system, Karen Ball, offered an earnest assessment that the fracking revenues would not be “anywhere near” the amount necessary to make up for the 18 percent cut . . .

. . . . This is so silly!  As if these guys think that nobody understands what fungibility means!  Marketplace is a weekday evening show that  focuses on business and the economy so its listeners certainly ought to be well acquainted with the concept of fungibility.  They should have readily caught the flaw that made this story's reporting totally nonsensical. Similarly, true Pennsylvania may be cutting budgets at its state universities by 18 percent but, even with those drastic cuts, the college students there must still be getting educations good enough to know the simple basics of what fungibility entails. . .

 . . . To put it simply, fungibility means money is money.  That means that if Pennsylvania wants its state colleges’ budgets to be down by 18% percent, a law that says that the colleges can directly glom onto some monies that would have headed first to state, doesn’t mean that the colleges get to actually keep more money in the end.  All the state need do is reduce the budget for the schools in the state system by exactly the amount of the “fracking income” the schools have been allowed to take directly, putting the budgets back again exactly where the state put them before, and that’s what you can expect* the state will and should do if the state had honestly assessed what level it thought the schools’ budgets should be relative to state needs and priorities in the first place.
(* You would expect this unless you are of a conspiratorial mind and believe that state politicians cut back on state school budgets only as a way to then induce the state colleges to permit fracking on their campuses.) 
So what is this reported poppycock about income from fracking royalties coming to the rescue of state colleges with tight budgets?  Pennsylvania has been very busy recently allowing the newly-invented practice of fracking everywhere in the state.  Fracking is a practice that was, according to the fracking industry, supposed to help the state’s economy. .  but its economy is doing so poorly that it is cutting back its state colleges by 18%?  (The story starts out with the line: “Pennsylvania's economy has been transformed by hydraulic fracturing for natural gas.”)

Truth to tell, fracking does extraordinary detriment to the environment and has all sorts of external negative costs to the economy.  Many of those costs come home to fully roost only in the longer term.

These laws cited in the Marketplace story are pretty much exactly what one commenting listener accused the Marketplace reporter responsible for the story was buying into: A public relations gimmick.  That’s why the Marketplace story with peppy lines “It's an idea already at work in other states” (citing Texas, Ohio, West Virginia, Indiana) sounds just like a transcription of an industry press release.

Why mobilize a public relations gimmick with respect to college campuses?  Because it’s a good bet that many college students will be well informed about the hazards of fracking and that they will mobilize to tell others.  This tactic might head those students off at the pass and put a dent into some of their youthful energy if those students can be debilitated by confusion.  Then there is the way that parents care protectively about their children: They might be offended that the concentration of young people found on a college campus would be put at risk by fracking there and in the vicinity (even if another Marketplace listener commented with sardonic humor: “Those crazy college kids... always wanting to get high on fumes”!).    

For some time now I have been saying that the fracking industry is engaging in a premeditated “hit and run” strategy, looking to do as much as they quickly can while knowing the damage it will inflict, trying to do it before people realize how dangerous and destructive the new technology is, how devastating to the environment and before the lower and lowering cost of alternatives like solar are recognized to have overtaken and relegated the fracking industry to a curious antiquity.

Essential to the industry’s plan is public befuddlement about the true costs of the tradeoffs the public is being asked to make.

The Marketplace story reports that under this kind of shell game arrangement with state colleges, a West Virginia University is to get “15 percent of the revenue” from fracking.  Unmentioned is that while the fracking company (and school) collect this revenue, 100% of the negative harm and destruction caused by fracking goes unshouldered by them, passed on to others, the school’s students and families included.

Here are some of the negative , external costs involved in hydraulic fracturing (even if the Marketplace story had an industry representative on hand to assure those listening to the story that it would be arranged that the “dirty work” would all be “screened from view” at the campuses:
    •    Decades of water pollution that involves the poisoning of:
    •        essential underground drinking water aquifers, and
    •        drinking water in rivers and streams- water treatment facilities will be wrecked.
    •    Massive quantities of water usurpation
    •    Radiation poisoning in the form of released radium and radon (lasting for thousands of years).- Gas produced from the Marcellus Shale is often, itself, radioactive.                       
    •    Earthquakes and instability of the land.       
    •    Significant poisonous air pollution.  (Resulting, for instance, in peripheral neuropathies for those nearby.)
    •    Release of carcinogens.
    •    Greenhouse gas pollution releasing climate change-causing carbon that was safely sequestered for 400 million years.
    •    Roadways and highways destroyed by intensive use by trucks carting in lakes of clean water and carting out about 80% of that afterward in foul “produced” water.
So here is a question: After state colleges allow fracking, will they get to keep at least as much money as they need to play for the costs of cleaning up afterward?  Will they get to keep at least what they need to compensate students for the injury of exposures?  Keep at least what they need to cover the cost of alternative water supplies for the colleges?  Keep money to cover the increased insurance costs for the college, those on campus and those in the vicinity?

The answer to all of the above is: No. . .  It doesn’t work that way.  For one thing the costs are all too great to cover in the end.  For another thing there is that bit we considered at the beginning of this article about fungibility.   Remember, fungibility means the colleges don’t actually get to keep anything at all because the state can cut them right back down to the funding level state officials thought they should be at in the first place.  And when it comes to sorting out the importance of relative priorities: States that permit fracking are going to have plenty other problems of their own to sort out and pay for, aside and apart from tending to the needs of their college campuses.

* * * *
Here are some prior articles, replete with many links, to earlier stories I've written about hydraulic fracturing for both National Notice and Noticing New York:
    •    WEDNESDAY, DECEMBER 7, 2011, Why Are Hearings on High-Volume Hydraulic Fracturing (“Fracking”) Held In New York A NATIONAL Issue?

    •    TUESDAY, DECEMBER 6, 2011, Testimony at Department of Environmental Conservation’s 11/30 Hearings on High-Volume Hydraulic Fracturing (“Fracking”): The LONG and the SHORT of It

    •    THURSDAY, DECEMBER 1, 2011, Wednesday’s Department of Environmental Conservation Hearings on High-Volume Hydraulic Fracturing (“Fracking”): Noticing New York’s Testimony Plus. .

    •    FRIDAY, JULY 29, 2011, Conundrum: If Gov. Andrew Cuomo Traded The Moratorium on Hydrofracking To Get Gay Marriage Would That Be Good Or a Bad Thing?

    •    MONDAY, NOVEMBER 21, 2011, Fracking Double Whammy: New York Loses Two Aces In The Hole When Confronting Climate Change (i.e.Weather Weirding/Global Warming)

    •    MONDAY, AUGUST 8, 2011, Hydraulic Fracturing’s Deleterious Environmental Effects: Andrew Cuomo’s Plan To End His State’s Ban and the Passage of the NYS Marriage Equality Law

Saturday, October 13, 2012

Biden’s Missed Opportunity In Vice-presidential Debate: Challenging Ryan On Divisive Plan For Medicare And Social Security Cutbacks

Everyone seems to agree that Joe Biden missed few opportunities during this week’s Vice-presidential debates to challenge Ryan with respect to lies or statements that were simply not true enough to remain unchallenged and uncorrected.

But there is one opportunity he missed. . . .

The moderator, Martha Raddatz, said: “Let's talk about Medicare and entitlements” and asked whether the candidates envisioned a future where the benefits under the “Medicare and Social Security” programs would change, or, in other words, whether program benefits would be reduced.

Ryan got first crack at answering.  He started with some warm and fuzzy acknowledgment of what the programs had done for his own family:
    . . . we've all had tragedies in our lives. I think about what they've done for my own family. My mom and I had my grandmother move in with us who was facing Alzheimer's. Medicare was there for here, just like it's there for my mom right now who is a Florida senior.

    After my dad died, my mom and I got Social Security survivors benefits, helped me pay for college, it helped her go back to college in her 50s where she started a small business because of the new skills she got. She paid all of her taxes on the promise that these programs would be there for her.
And then he supplies the kicker which is key.  Note his use of the words “honor” and “reform,” “reform” being the euphemism for altering those programs he has just praised by cutting back the benefits:
    We will honor this promise. And the best way to do it is reform it for my generation.
Notice how Ryan says “my” generation, as if he expects he will be, a significant individual taking part in the sacrifice.  The sacrifice won’t be made by the Romneys and other individuals who in their later years are in the 1%, (I think that’s Ryan’s legitimate expectation about where he’s going to be in his later years), the sacrifice will be made by those people these programs are intended to work for, those who don’t win the 1% lottery in life.

And then Ryan says straight out that he an Romney plan to divide the country up into two groups, the young and the old and make it seem as if his generation’s `sacrifice’ would be part of preserving benefits for the older generation:
    You see, if you reform these programs for my generation, people 54 and below, you can guarantee they don't change for people in or near retirement, which is precisely what Mitt Romney and I are proposing.
So the country would be divided up between two groups, those 55 and above getting all the benefits of Medicare and Social Security that Ryan described as being important to his family, and those “54 and below” who will get something less.  (It does seem as if the Romney/Ryan ticket loves to divide the country up into groups: These who look after themselves and the 47% who don’t, the 30% who are takers and those who supposedly aren’t.)

So Romney and Ryan think that by simply saying this, the older generation should feel secure about keeping their benefits?  They don’t think that people have heard about “divide and conquer” as a strategy?

Let me get this straight: Romney and Ryan want to create a country where one group, an older, aging group that is slowly succumbing to their mortality (i.e. dying off) will have good, traditional Medicare and Social Security benefits, and another group, a group with inferior benefits that, that each year will become an increasingly larger group?  How long do you think that will stand?  How long do you think that the increasingly large younger group will tolerate there being an older group that has better benefits which they don’t?

Who thinks this isn’t a plan to get rid of Medicare and Social Security altogether?  The older generation should feel secure that the Romney/Ryan politicians of the future will continue to “honor” the “promise” of these programs because the older generation has voted to allow them to divide the country up into two factions with antagonistic interests?

But, by the way, let's pay sharp attention here: It isn’t just two groups with newly created antagonist interests that will be created, that younger group now motivated to get rid of the superior benefits of traditional Medicare and Social Security, and the older group from whom they would now like to take them: There is a third group.  That third group is the group of which Romney and Ryan are a part, the group with a 1% mind set that’s is busy figuring out how to send the Medicare and Social Security programs to the trash bin.

So, there it is:  That’s the opportunity Biden missed in the debate: The opportunity call Ryan out on the Romney/Ryan ticket’s divide and conquer strategy to eliminate Medicare and Social Security benefits entirely.

One more thing before we leave the subject of Social Security: It should be recognized that the main challenge currently being faced in keeping the Social Security healthy is that more and more of the nation’s wealth and income is being shifted to an ever smaller wealthy subset of the population who contribute a much smaller percentage of their income to Social Security (the more you earn the less you pay percentage-wise to support Social Security) while drawing greater benefits by also living longer.  It may seem astounding but it's absolutely true, read: Friday, April 29, 2011, Social Security Inequation: This is Rich, Living Longer While Everyone Else Enjoys It Less; Putting Two Together.