M. Night Shyamalan’s Shorties

Time Traveling Senator: There is some hint that Senator McCain knew what questions would be asked at Saddleback ahead of time. It is worth noting that Rev. Warren did not say “We haven’t discussed that yet”, but rather “You’re jumping ahead.”

Duhpartment of Homeland Security: Secretary Chertoff says we need to crack down on smugglers. No kidding, Skeletor. Did you come up with that on your own, or have you been watching a Miami Vice Marathon?

Walk softly, but carry a big stick: The doctors who run the New England Journal of Medicine say that lawsuits are important to keep our medications safe. Truth be told, fear of lawsuits is probably a more powerful regulator than the Government in many industries.

Smoke on the Blackwater: It looks like some Blackwater employees may actually face murder charges for murdering 17 Iraqis in the street in the middle of a traffic jam.

Speaking of Iraq: It turns out that the whole war is little more than a huge corporate bailout for Halliburton, and that the “deal” to control that sovereign nation’s oil reserves was made months before the invasion. Disgusting.

Oh look, honey, there’s a nice one: It’s an official steal-my-laptop TSA approved computer bag. For people that think it’s cost effective to pay $220 for a bag that saves them 3 minutes every time they fly. Wake me when TSA approved shoes come out.

I’ve heard of Italian sausage, Polish sausage, and breakfast sausage, but Japanese sausage is a new one on me: The Japanese learned to make sausage from German POWs during The Great War. Rare pictures prove it.

Beauty is more than skin deep: and here are some special beauticians who prove it.

How do you like your red herring served?: Paul Krugman weighs in on corporate taxation.

Got Pens?: USA Today points out that many families have trouble getting school supplies together. Please think to put an extra package of things like crayons and paper in your cart for your local school supply drive!

Excuse me, there’s an elephant in the room: Business Week says “But the fiscal policy dispute, while informative and fascinating, has focused too much on tax regimes and not enough on the real challenge: health care. When it comes to domestic, nonmilitary fiscal policy in the new millennium, everything is dwarfed by health care.” Well put.

It’s called a No Fly List, not a No Answers List: A judge has made a ruling that “would allow individuals to demand information from the government, present evidence on why they should not have been on the list, and take the case to a jury….” How about that, the 5th and 6th Amendments apply to the No Fly List!

mmToasty: Bank Stocks That Are Toast.

This is not a crazy conspiracy theory: A computer security expert says that Diebold is stealing elections. The kicker? He’s a lifelong Republican.

Keep your wits about you; there’s always something to smile about. How about some cute kittens? Seriously, have a great week.

The Taxman Doesn’t Cometh

A lot has been made of the latest GAO study showing that more than 2 out of every 3 businesses in the United States pay no business Income Tax.  Heck, my kneejerk reaction was that they created AMT over 155 high-income individuals who managed to pay no taxes, yet 2/3 of businesses got away tax-free?

Well, then I got to looking at the story.

First, let me review a couple of accounting and tax terms.  Gross Income, Revenue, and Sales are terms that describe all the money coming in, before expenses.  Deductions are things the IRS lets all of us — individuals and businesses alike — take out of our income.  Expenses are the cost of doing business;  individuals can’t deduct their expenses, but businesses can deduct a lot of expenses (including money paid to employees, rent, cost of goods for sale, etc.). Net income or profit equals Revenue Minus Deductions. If you want to know way too much about the kinds of things businesses can deduct, the IRS publications 334 and 535 are just the beginning.  For now, Revenue – Deductions = Income is all we need to remember.

Just like us, and many people forget this basic fact, corporations and individuals only pay income taxes on income. You have deductions, even if it’s just the standard deduction and your allowed exemptions;  so do businesses. Just because somebody sold a lot of product doesn’t mean they made a lot of money.  There’s the cost of making or buying the product.  There’s the cost of the employees.  There’s insurance premiums. There’s shipping. Advertising. Accountants and Lawyers. Permits and licenses.  Some of these, you can take advantage of too — if you have enough deductions to make itemizing a good idea.  You can even deduct the cost of TurboTax on your taxes!

But I digress.  Just because these businesses took in money doesn’t mean they made money.  They might have lost money!

Another factor in play is that the majority of American businesses are in fact small businesses. The CNN article referenced above points out “Generally, many small firms, because they do not have shareholders, are able to shift corporate income to individual income.”  So instead of paying a corporate income tax, they file a Schedule C with their regular 1040.   They aren’t getting out of paying taxes, they’re just using a different form.

And the last thing I want to say about this is that just because a company (or individual) isn’t paying income tax doesn’t mean they aren’t paying any taxes. They still have business licenses and regulatory fees;  they still may pay sales tax on many items; they still pay property taxes;  if they have employees, they pay withholding taxes and Social Security taxes and Unemployment Insurance taxes; in some states they have taxes on gross revenue to pay.  All those taxes, by the way, are tax deductible for Federal purposes.

As an aside, I would like to address the idea of a windfall profits tax on oil companies. Critics say that this would result in oil companies deliberately bringing less petroleum to market, making oil and gasoline prices worse, since paying taxes is far worse than making money.  I disagree.  The title says it all:  windfall profits tax.  Oil companies can get out of paying it by simply making less money, spending more money on things like exploration and building refineries — activities that would incidentally help the economy and bring down fuel prices. In fact, the actual Senate bill defeated earlier this summer “would create a 25 percent windfall profits tax on companies that don’t invest in renewable fuels or electricity production.”

In closing: disaster tourism (of course you could see Pripyat much cheaper and more safely by playing Call of Duty 4;  Yes, we are having a recession; awwww, it’s a problem to untangle air traffic across the freaking nation by having planes fly over a really swank neighborhood at 6000 feet; parental consent for abortion laws don’t work and destroy lives; the last word on the Teen Mom Pact (if only!);  it turns out that the “OMG teh complications!” argument against Gardisil doesn’t work, because Gardasil has half the complication rate of most of the vaccines we line our kids up to take (what part of “would I rather give my daughter a shot or possibly watch her die of cancer?” is hard?); good thing NPR is radio, because the photo undermines the message; how the heck did Rachel Ray get to be a top earning chef?; Yes, Social Security will be paying out for years to come; and no surprise, Americans are driving less.

In which the War on Drugs is out of control

I first learned yesterday of a police raid gone wrong.

Busting down the door when the warrant doesn’t specify no-knock? Bad.

Shooting the dogs as they ran away, then leaving them to bleed to death while you interrogate the homeowner? Worse.

Refusing to believe that the homeowner is in fact the Mayor as you force him to kneel on the floor handcuffed in his boxer shorts for hours? Worse still!

But wait! there’s more!

The unopened package containing the drugs giving the cops the “grounds” for the warrant was delivered by the cops! That’s the worst.

There is clearly more to this story, and more keeps dribbling out every day. But as things stand, this stinks.

Yes, one of many reasons we need a Fourth Amendment. You know what we also need? A law that says cops are responsible for the damage they do if it turns out they don’t find what they are looking for. All of a sudden, I think cops will be a lot more careful about busting down doors and shooting dogs.

Cross-posted at TMV.

In closing: Obama is more experienced than 3 of the 4 guys on Mt. Rushmore, and it turns out he’s not afraid to Pledge Allegiance To The Flag; Alternet’s got it wrong, immigrant raids must not stop but they must jail the bosses instead of the workers; and two new sites, War or Car and If You See Something (from the guy who brought you Alien Loves Predator).

Shadow of the Shorties

Japanfilter: I couldn’t let the 63rd anniversary of the Hiroshima bomb pass without some sort of remembrance. Please check out the Japanese American Relocation Project Archives, renovation of a trail through the woods that used to be a Japanese neighborhood, and a virtual noblewoman reading what is widely regarded as the first novel ever written in Japanese or any other language.

You know what other anniversary it is?: Harriet handing George a report warning that some guy named Bin Laden wanted to attack the United States.

Clean, Clear, Water: preferably without getting killed.

Good advice: The folks who brought us P90x and 10 Minute Trainer (which is a very good workout, by the way) tell us to Think Thin.

A damn shame: The CDC reports that average waits at American Emergency Departments have risen from 38 minutes to almost an hour. What makes matters even worse is that’s an “average” number, not a “typical” number. About half those people actually waited less than 31 minutes, but the other half had much longer waits. Why? More visits and fewer ERs to take patients! Oh, and 17% of those patients had no insurance. No word on the relative acuity of those patient’s complaints.

Running Argument: The USPS says private companies always do things better. Congress says prove it. The USPS replies duh, private companies always do things better. Now think about this. For under $0.50, I can get an envelope delivered almost anyplace within a hundred miles the next day, and delivered almost anywhere in the lower 48 within 2-5 days. How much does FedEx and UPS cost to get the same letter delivered in the same time frames? How much would a courier for a local letter cost? In what possible way could privatization make things better?

I love Paris?: I have to admit, Paris Hilton is classier (and smarter) than most people give her credit for. Her reply to the McCain ad is clever, polite, and cutting.

Maybe e-passports weren’t such a good idea: They’ve already been cracked.

Get BAC: The Countrywide merger with Bank of America is threatened by bondholder lawsuits. That’s over and above the State AGs that want a piece of Countrywide.

Oh Freddie: Freddie Freddie Freddie, what’s with the losing so much money? How on earth did you end up with a situation where 10% of your portfolio accounted for half your losses?

Where’s Poochie?: (Reference) Diane Duane (yes, that Diane Duane) points out GPS for dogs, and notes that it should work for cats too. Some nut suggesting using it for your kids in 3… 2… 1….

And finally: why bailouts stink but why we need them anyway.

Econ Round Up

Giddyap, li’l economists!

Let’s start with government manipulation of data.  Remember when I said that manipulation of inflation data allowed for instant manipulation of Gross Domestic Product data?  A smarter economist has gone much farther than I could to outline the ways that GDP is manipulated.  In short, if you look at the big picture without the rosy glasses, we’ve been in a recession most of the last 3 years!

The New York Times is a little slow on this one, saying that More Arrows Seen Pointing to Recession.  Analysts start to theorize that the angry mob of unemployed and underemployed people who can barely gas up their cars to go buy groceries aren’t there out of sheer laziness, film at 11.

And about those groceries, store brands are appearing in more and more of our carts.  So much for consumer staples being recession proof!

Locally, a lot of school supplies are coming from Dollar Tree and a lot of school clothes are from Goodwill, where they offer a student and teacher discount with ID.

Minyanville has a nice piece on how the latest minimum wage increase still leaves workers behind where they were 11 years ago.

Speaking of inflation, Alternet goes out there to point out full-on stagflation when you look at real employment rates and actual price increases of things average people buy. “Let them eat pizza” indeed.

Citizen Carrie is right on when it comes to labor issues.

In closing: updating the Kosher rules for the modern global economy; Toyota’s Segway alternative (maybe they’ll toss one in if you buy a large SUV); too fit to be President??; and why is Wal-Mart afraid of a Democratic win in the fall.

Selected Passages Only

Today I became distracted by a lengthy essay by science-fiction author and devout Mormon Orson Scott Card. Today Mr. Card is writing about marriage. I am sometimes amused by the sanctity of marriage crowd, people who get downright vehement about marriage being “between one man and one woman”. The basic arguments for this boil down to this:

  1. It’s always been that way.
  2. It’s that way for biological reasons, because only one man and one woman can make kids together, and the kids deserve the protections of a stable family unit.

It is worth noting that Mr. Card begins not from this point, but by blasting the courts for what he considers to be overriding the voter consensus. It has apparently never occurred to him that voters can be wrong. Voters once thought keeping slaves was a perfectly good thing. What if there were a referendum to execute any American Idol contestant who performed inadequately; Would the courts be wrong to override that?

But back to the issues and the arguments. The “it’s for the kids” argument appears sound on its face, but we all know that just because it takes a man and a woman to make a baby doesn’t mean that the man is actually required beyond the first day. Don’t get me wrong, I have no envy of single parents, but the “stable family unit” that could be had with a loving partner could also be had with extended family or even a community of like-minded friends.

The argument I truly take issue with is the “it’s always been that way.” I have never liked these self-referential logic deals: we do it that way because that’s the way we do it. And why exactly is that? And this particular one — “marriage is a man and a woman because it’s been that way for thousands of years” — doesn’t even hold up to scrutiny.

How quickly we forget all the cultures mentioned in the Wikipedia article on polygamy.

How quickly we forget that even modern Islam allows multiple wives, a provision that allowed for young widows to be taken into another man’s home in an environment where women were prohibited from work outside the home. Interesting side note, Islam doesn’t allow for adoption either; so much for the “it’s for the kids” argument too.

How quickly we forget that multiple wives and concubines were common among wealthy Japanese and Chinese until as late as the 19th century — within the living memory of some.

Some may criticize and say that it’s always been that way in the Bible. I suggest reading the Bible before saying that.

How quickly we forget Abraham, Father of Many Nations, who had children both with his wife and his servant-woman.

How quickly we forget Jacob, Father of the 12 Tribes of Israel, who was married to a pair of sisters.

How quickly we forget the harems of King David and King Solomon.

Sure. We’ve always done it this way; marriage has always been between one man and one woman. Sure, none of these situations is gay marriage; I am only taking out the old logic, not bringing in the new logic.

In spite of all this I am willing to make a deal with the people who think marriage is a religious institution and the government has no business being involved, because there actually is something to that. The problem is that modern marriage is a synthesis of a relationship and a business contract, with common law and statutory law baggage going back thousands of years. Let’s start calling the religious institution “marriage”, and the government can issue licenses for “civil union.” The various churches can define marriage however they like, but the civil union will have what is now the government definition and protections of marriage. Everyone will be free to choose whether they want one, both, or none of the above. However, not only will the government not be able to say who can and can’t be married, the church will not have any authority whatsoever to say who can and can’t have a civil union.

How does that sound?

It’s almost the end of the month, so I thought I would go ahead and quickly bring you a July Retrospective: 2003, 2004, 2005, 2006, 2007.

In closing: how convenient that we can blame another country for our salmonella problem; new moderation policy looks much like the old moderation policy; Julie is right about illegal immigration; how ironic that gas prices are making communities force developers to observe common sense; an interesting view on education; Shark-fu writes about the federal budget so I don’t have to; some new daily reading, Kill This Character, Please; the campaign commercial that backfired due to lousy research; Federal Employees Work for Us; granted ADP job numbers tend to be pessimistic compared to the Department of Labor, but they say we only gained 9,000 jobs in July (and the scary part is that Vegas alone may account for that — I kid, those jobs start in spring); and finally, talk to your kids about Linux, before somebody else does.

Indy, WaMu, Wells, and someone to Wachovia

Yes, I know it’s supposed to be pronounced wah-KOH-vee-ah.

I have been viewing the mortgage crisis and the resultant banking crisis through a different lens than most people. Sure, I try to send snapshots of what I am seeing, but it’s probably not what you are seeing. I have explained mortgage-backed securities at some length here, Wikipedia has a more in depth article here, and if this is a foreign term to you, reading those might cause the rest of this to make more sense.

In a nutshell, the house of cards started to come down when some investors realized that all mortgage-backed securities were not created equal: the ones Fannie and Freddie were buying up had much lower risk than the ones John Q Hedge Fund was buying. This made it more difficult to sell these securities; and if they could not be sold, the originator of the loan could not make new loans; and if those mortgage companies couldn’t make new loans, people might not be able to buy houses; and for a variety of social, political, and economic reasons, we couldn’t allow that! The obvious solution was to let Fannie and Freddie buy subprime paper. This would both revive the market for the stuff, and free up the Good Stuff for other investors (since Fannie and Freddie have a limited amount of money).

So by this time last year, Fannie had almost $50 Billion in subprime notes, and Freddie about $120 Billion. Spread the risk. I mean, love. Spread the love. Also by this time last year, the subprime crisis had caused its first corporate bankruptcy. If you only understand one thing out of all this, it should be this: All of us have a vested interest in this thing unwinding in as prompt and orderly a fashion as possible. Most housing is purchased using a mortgage; even rented housing usually has a mortgage.

Because I work in real estate, I deal with mortgage companies on a daily basis. I’m calling mortgage brokers; I’m trying to get pre-approval letters for clients; I’m trying to get short-sale approval; I’m trying to help clients purchase foreclosed homes. This being said, there were clear warning signs that IndyMac was in trouble. It was hard to read the situation, because the same signs were hanging in a lot of places, and still are.

Barring future disaster, Wachovia will survive in my opinion, because they are making sensible cuts now. You may have heard they are getting out of the mortgage business? It turns out “will no longer offer mortgages through brokers” effective Friday. You can still walk into a branch and ask to speak to a loan officer on Monday. That’s not a panic, but an orderly shutdown.

A lot of people are worried about WaMu and I can’t blame them. Wall Street has been worried for some time. Just yesterday they, like Wachovia, announced “billions in mortgage losses” for the last quarter.  Getting them to approve short sales is like pulling teeth — apparently they want to foreclose and have thousands of REO homes to get rid of!  People complain about their mortgage division’s practices. Not a month goes by that I don’t have at least 2 visitors to ShortWoman looking for some variant on “talk to a human at WaMu“. Things look bad for WaMu, yet it’s not the same warning signs as IndyMac.

And then there’s Wells Fargo.  Jim Cramer has been telling us things are wonderful at Wells for a year now. Just today he reiterated that.  Now, on one hand, Jim is a smart guy who has made a lot of money scrutinizing the balance sheets of banks and investing accordingly.  He is looking at the situation from the top.  I am seeing it from the bottom, and the sign is easier to read from down here. It’s the sign I saw at Countrywide (whose takeover by Bank of America is cruising towards completion).  It’s the sign I saw at IndyMac.

Wells Fargo owns a lot of foreclosed homes. By my count they have about 500 listed for sale in my metropolitan area alone.  And if you want to purchase one of them?  You have to be approved by a Wells Fargo mortgage consultant.  Your offer won’t even be sent in without a pre-approval letter from them!  They will of course try to sell you a mortgage while they are at it.  For a company that needs to sell property pronto, they are going out of their way to make it difficult to buy.

In closing: sometimes “equality” isn’t quite as good as everyone might like; when the budget gets too tight, even potentially life-saving medical care is optional spending; short version of the economic differences between Senator McCain and Senator Obama; the view from the bottom of our economy is pretty sad; and the iDiet (not an endorsement in any way shape or form).

Rated PG-13

Ok, let me spell this out for you. The new Batman movie is supposed to be great.  The performance of now-late Heath Ledger as the Joker is described as “mad-crazy-blazing brilliant“. Time Magazine says “With little humor to break the tension, The Dark Knight is beyond dark. It’s as black — and teeming and toxic — as the mind of the Joker.” Holy big screen, Batman, this is not — repeat, not — a rehash of the old 60s Batman TV show.

All this being said, I’d like to point out that the movie is rated PG-13.  Whatever made anybody think it was appropriate viewing for kids? Even one of the reviewers said (emphasis mine) “This film is not for children, and I would discourage parents from taking anyone under 12 to see this movie.”  Imagine that.  Maybe — just maybe — that’s why it’s rated PG-13.

But hey, my job isn’t to parent your kids.

In closing:  who needs handcuffs when you have schedule 4 pharmaceuticals that can cause severe reactions; Susie wants to know if you feel safer knowing that there are truckers who should be legally disabled driving big rigs; an Appeals court thinks it’s just fine to lock somebody up just because the President says he’s a bad guy; and The End of White Flight.

My Love Hate Relationship with BlogHer

Or, Blog Naked.

According to my user profile, I have been a member of BlogHer for 2 years and 20 weeks. I have also apparently posted 5 times there in the last year. I have cross-links to and friendships with many BlogHer members, including one of the founders. I have supported several of their initiatives, including their maternal health campaign.

Here’s the thing. BlogHer was conceived back in 2005 with a “mission to create opportunities for women who blog to pursue exposure, education, community and economic empowerment.” The idea was to be one vast commons for women who write blogs: we could find one another; we could learn from one another’s writing styles; we could share information that perhaps the male half of the blogosphere didn’t care about; we could join together on issues of mutual importance.

They got big, and they got important. Conference keynoters are women you have heard of. The conferences themselves are among the biggest blogging conferences anywhere, with meetings both in major American cities and Second Life* — both versions of the current conference are sold out. They are considered by some to be THE most influential womens voice in blogging today. They are a Fast 50 contender over at Fast Company. C|Net just can’t shut up about them.

Unfortunately, vast swaths of BlogHer have become everything I dislike about many womens magazines. Horoscopes (even if I believed in Astrology, the idea that any one reading can be applied to one out of every 12 people is ludicrous). Fashion. Mommyblogging. The only thing missing is 83 cover stories about sex and “pleasing your man”.

Just a couple of days ago, they announced a huge, huge, partnership with iVillage. Huge, as in it includes $5,000,000.00 in venture capital. Oh wait, once you add in existing investors, it’s somewhat more than that. Good for you, ladies. That’s awesome! No really, I’m happy for you.

But here’s my problem. Many people see this as acknowledging the economic power of women. I see it as condescending to women. Do you think iVillage wants our voices, or our wallets? When C|Net (yes, C|Net again) points out that “On the tech conference circuit, Yahoo, Microsoft and Google are the typical deep-pocketed sponsors. But when the tech is geared toward women, the pockets are those of Chevrolet, Macy’s, and K-Y Jelly,” I wonder why Yahoo and Google don’t think it is worth talking to us! Lots of food there, and plenty of other “communities.” As I look through the official list of sponsors, I notice the “tech” company that gave the most money is Nintendo! Microsoft actually is there, along with HP and Intuit, at one of the lower levels.

Sorry, I don’t think I want to attend a conference sponsored by K-Y Jelly. Unless, of course, it’s clothing optional. Ok, not even then, but it would be a more interesting and appropriate event for K-Y to sponsor.

No “in closing” today. I hope nobody is dissapointed.

* I actually suggested running the parallel online conference in IRC or even AIM. My rationale was that being text formats, they had very low system requirements, low bandwidth requirements, and had free downloadable clients. But glitzy and fun won out over cheap and easily accessible. Maybe I should have mentioned it was easier to hide what you were doing from your boss?

It’s Follow Up Friday!

Please welcome David Sirota to the list of people pointing left and saying “Excuse me, the Center is over there!”

It turns out that 85% of us — 17 out of 20 people — are no longer snowed by the rosy “official” economic numbers and are “unhappy” with the economy. The “unhappiness” among Blacks and Latinos is higher. Couldn’t have anything to do with the “decoupling” of traditional measures from reality? Maybe everybody will feel better when that minimum wage hike begins next week.

Two thoughts on Fannie, neither of them happy. Nice of you boys to catch up with me on this one. It only took a financial crisis!

Fiscal responsibility turns out to be nothing more than an empty campaign promise. At least, for many Republicans.

Jill put it best, “Perhaps this will put an end to the idea that the private sector does everything better”.

Iraq and the US are close to agreeing on troop cuts. It’s about time. They have been trying to step up so we would step down for some time now!

And in closing, some doctors are cutting out the middleman, insurance companies. Personally, I think this is a step in the right direction. After all, if enough doctors and patients refuse to play in the for-profit system, something will have to change if insurance companies want to remain in business.

Have a great weekend!