Wednesday, March 14, 2007

Back To Work

Waterboy thinks I should get back to work, so here goes...

From the pen of the Mighty MogamboSo why hasn't gold risen? If you are the kind of person who wisely gets clues from the soundtrack, then you have noticed that the background is filled with the sound of cackling and muted screams of pain and horror. Thus you are prepared when the honeyed voiceover says "Evil people are doing evil things with our economy and money. And manipulating the price of gold to keep it from rising alarmingly, which would provide stark testimony of their staggering incompetence, is just a relatively benign part of their nefarious activities!"

And by this I mean the infamous Plunge Protection Team, where the Treasury, the Federal Reserve, big banks and unnamed others all get together to bail us out of any market mishap by buying, buying, buying, using money created by the Federal Reserve expressly for the purpose.

And you can be sure that they are out there, right now, doing exactly that thing, in response the to recent market losses. And furthermore, the market will obediently go up as long as they keep buying, buying, buying and all the money floods into the economy, which will also, theoretically, benefit from this deluge of new spending, and thus, they think, mission accomplished, applause, applause, applause.

But whether or not they succeed this time or not, their efforts to prevent the collapse of such a preposterous economy will one day fail, and the dollar will fall to relative worthlessness, and money and wealth will be lost by the supertanker-full, and there will be misery and suffering to extents beyond your nightmares. This is the classical end to an eternally-classic situation; a government spent a country into bankruptcy.
Later in the article, Mogambo states "The economics profession has failed America." And ditto the egregious conduct of the schools, the governments and the media (who are supposed to be the public's watchdogs, but are now their willing lapdogs)."

Of which Dan Rather agrees by saying "In many ways," said Rather to loud applause, "what we in journalism need is a spine transplant." To longtime CBS broadcaster Dan Rather, American journalism in recent years "has in some ways lost its guts."

During his hour-long keynote address Monday at South by Southwest Interactive, Rather opined at length on the state of his profession, in which too many journalists have become lapdogs to power, rather than watchdogs.

"I do not exclude myself from this criticism... By and large, so many journalists--there are notable exceptions--have adopted the go-along-to-get-along (attitude)," he said.

So, because of this "access game," journalism has degenerated into a "very perilous state," he said in response to a question from his on-stage interviewer, writer Jane Hamsher.

Rather reiterated his feeling that many journalists today--and he repeated that he has fallen for this trap--are willing to get too cozy with people in positions of power, be it in government or corporate life.

"The nexus between powerful journalists and people in government and corporate power," he said, "has become far too close."

You can get so close to a source that you become part of the problem, he added. "Some people say that these powerful people use journalists, and they do. And they will use them to the fullest extent possible, right up until the point where the journalist says, 'Whoa, that's too far.'"

It is incumbent on journalists to be willing to risk their access to power to seek out the truth behind a story, he said. And they shouldn't be willing to water down the truth to protect their access to power.
Rather goes on to opine "media conglomerates get[ting] bigger" which of course often leads to layoffs. Here in Colorado Springs our local paper recently laid off some more of its force. In fact, despite a supposed 4.5% unemployment rate, there really aren't any jobs to be found. A local temp agency with whom I have a good relationship confided to me that in the past 2 weeks they haven't even seen anything come through. Meaning no new jobs.

Speaking of jobs, Paul Craig Roberts, Assistant Secretary of the Treasury under Reagan, writes "Job growth over the last five years is the weakest on record."
Over the past five years the US economy experienced a net job loss in goods producing activities. The entire job growth was in service-providing activities--primarily credit intermediation, health care and social assistance, waiters, waitresses and bartenders, and state and local government.

US manufacturing lost 2.9 million jobs, almost 17% of the manufacturing work force. The wipeout is across the board. Not a single manufacturing payroll classification created a single new job.

Communications equipment lost 43% of its workforce. Semiconductors and electronic components lost 37% of its workforce. The workforce in computers and electronic products declined 30%. Electrical equipment and appliances lost 25% of its employees. The workforce in motor vehicles and parts declined 12%. Furniture and related products lost 17% of its jobs. Apparel manufacturers lost almost half of the work force. Employment in textile mills declined 43%. Paper and paper products lost one-fifth of its jobs. The work force in plastics and rubber products declined by 15%. Even manufacturers of beverages and tobacco products experienced a 7% shrinkage in jobs.

The knowledge jobs that were supposed to take the place of lost manufacturing jobs in the globalized “new economy” never appeared. The information sector lost 17% of its jobs, with the telecommunications work force declining by 25%. Even wholesale and retail trade lost jobs. Despite massive new accounting burdens imposed by Sarbanes-Oxley, accounting and bookkeeping employment shrank by 4%. Computer systems design and related lost 9% of its jobs. Today there are 209,000 fewer managerial and supervisory jobs than 5 years ago.
Later in the article he writes "Economists who look beyond political press releases estimate the US unemployment rate to be between 7% and 8.5%." which corroborates the temp agency's experience.

Mr Roberts goes on to inform us that "Offshore outsourcing and offshore production have left the US awash with unemployment among the highly educated.

UC Berkeley, in a 2003 study, estimates that as many as 14.1 million jobs are in danger from outsourcing. Now this is in a country that only has 140 million jobs. But more precisely there are only 100 million actual jobs as 40 million of that total are government and are therefore no in any danger of being outsourced. That means 14% (nearly 1 in 6!) of actual jobs are in danger of being outsourced. Why? Because it is so much cheaper to pay someone in India.

Berkeley gives us an example of the pay differences.
    Telephone operator:
  • US: 12.57
  • India: Under $1
    Payroll clerk:
  • US: 15.17
  • India: 1.50-2.00
    Financial Researcher/Analyst:
  • US: 33.00-35.00
  • India: 6.00-15.00
Where does that leave us? Honestly, it leaves us with nothing. If we don't change what we do we are going to find ourselves destitute and dependent upon the kindness of other countries.

We need to make drastic changes in this country and we need to do it quickly. Of course we need to fix the monetary situation but that has been covered elsewhere. What I propose is that we focus on two areas, research and manufactories. We need to have an edge on the other countries in such a way as they and their people will want to purchase our high tech solutions in areas such as medical, energy, and software as well as low-tech goods that can be exported to willing consumers across the globe.

Countries that produce goods bring in wealth from other countries as well as keep the wealth of that country inside of it for use by its citizens. I am not suggesting that we isolate our economy, rather that we start using the global economy to start creating wealth. America has always been a contender in this global economy, not because of we have cheap wages, but because of our high productivity and our high quality. The American worker out-produces most every other worker across the globe. This is due to our work ethic (which is certainly flagging but I believe can be brought back) and our ability to innovate and implement new technologies and procedures. Ideally we would implement the research at our manufactories to create entirely new products, from simple and cheap to the complex and high-end.

America has long been able to compete against cheaper labor. In fact, for the past century there has been cheaper labor available, all attempting to compete with us not just here on our soil, but also globally. America has excelled in the past and we can again. But to do so is going to require these changes and more. The sooner we start, the less painful it is going to be.

Tuesday, March 13, 2007


This is a test of the emergency broadcast system.
  • This is only a test
  • Repeat, this is only a test
  • If this were an actual emergency this broadcast would have been followed by information concerning the life threatening disaster about to befall you

    1. numero uno
    2. numero dos
    3. numero tres

    description one 1
    blah blah ....

    description 2
    waffle waffle ....

    • 1
    • 2
    • 3
      • 4
      • 5

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  • bottom
  • Tuesday, March 06, 2007


    My new four letter word. Since Comcast took over Adelphia I have not since had a reliable connection. Today it has been 9.5 hours (and counting) of being mostly not connected.

    Some examples...
    Something smells like comcast
    you look like comcast
    comcastit all to comcast
    you're a comcast
    And lets not forget the ever popular "comcaster"

    They NEVER acknowledge that there is a problem. NEVER. I always get told that everything is just fine. And each time I call in they tell me they are putting it in the notes that I have been having problems and each time I call in there is never any notes. NEVER. Comcastards.

    The other local choice for "high speed internet"? Qwest. Lovely company that they are... one could even say Qwest is Comcastic! but at least Qwest is reliable. But I cannot get them here. So I am stuck with the Comcastic Comcastards unless I want to go with dial up which would mean I would have to have a phone line just for that, you guessed it, thru Qwest. Comcastic!

    Monday, March 05, 2007

    Continued Immigration Raids

    A story in the paper last week on the continued immigration raids warns that if they keep this up that we wont have enough people to clean our businesses and restaurants. This is perfectly true if the economy was a zero sum game, but it isn't. One tiny line in the article stated what would actually happen. It mentioned that the alternative to not having enough people was for employers to raise wages. Somehow, that little nugget of wisdom was snuck in in the second to last paragraph as if that wasn't already the obvious answer.

    This particular raid focused on one janitorial company that spans numerous States, the practical affect was to spread out the temporary economic damage/chaos that is caused by such raids. The company lost about 160 employees and if those 160 were all in one place it would cause some upheavals in the local market but as each State lost a few employees it doesn't hurt the economy. It also has the added benefit of utilizing agents across the nation so as to not require a large mobilization and it sends the message all across the nation to the illegals, rather than in just one city or town.

    And with each illegal removed other illegals will be more and more likely to self-deport as the cost/benefit ratio changes. This should be the goal. I am all for removing the 12+ million illegals in this country but I think it should be a continual process rather than an overnight one.

    Saturday, March 03, 2007

    Income Tax Not Plain and Clear

    The following is excerpted from Mr. Cryer's motion to dismiss with prejudice. I have mentioned this before about how the income tax isnt imposed like other taxes are. Mr Cryer, a lawyer by trade (and successful at that), compiled this list in his defense.


    The Internal Revenue Code does not "Plainly and Clearly Lay" any liability for an income tax on defendant. The Income Tax Law, Subtitle A of Title 26, United States Code, imposes a tax on the taxable income of certain individuals in § 1:
    "26 U.S.C. § 1. Tax Imposed.
    "(a) Married individuals filing joint returns and surviving spouses
    "There is hereby imposed on the taxable income of —
    "(1) every married individual (as defined in section 7703) who makes a
    single return jointly with his spouse under section 6013, and
    "(2) every surviving spouse (as defined in section 2(a)),
    a tax determined in accordance with the following table:
    . . .
    "(b) Heads of households
    "There is hereby imposed on the taxable income of every head of a
    household (as defined in section 2(b)) a tax determined in accordance with the following table:
    . . .
    "(c) Unmarried individuals (other than surviving spouses and heads
    of households)
    "There is hereby imposed on the taxable income of every individual
    (other than a surviving spouse as defined in section 2(a) or the head of a
    household as defined in section 2(b)) who is not a married individual (as
    defined in section 7703) a tax determined in accordance with the following
    . . .
    "(d) Married individuals filing separate returns
    "There is hereby imposed on the taxable income of every married
    individual (as defined in section 7703) who does not make a single return
    jointly with his spouse under section 6013, a tax determined in accordance
    with the following table: . . ."

    but this section does not designate anyone as liable for the payment of the tax.
    It should be noted at this point that titles and headings, such as "Married individuals and surviving spouses filing joint returns" and "Heads of households" are not part of the law and have absolutely no legal effect. 26 U.S.C. § 7806. Therefore, the actual statute commences with "There is hereby imposed . . ." The imposition of the tax is on taxable income, only, not on any person or entity. In contrast, see 26 U.S.C. § 884, discussed more fully infra, which does impose a tax on an entity.

    Subtitle A does, however, designate partners as liable for the taxes on income of a partnership, but only in their "individual" capacities (26 U.S.C. § 701) while certain partnerships are declared liable for excess recapture of credits (26 U.S.C. 704). Foreign corporations are specifically designated as the party liable for payment of the "Branch profits tax" imposed by 26 U.S.C. § 884 (which, incidentally, does impose the tax on "any foreign corporation").

    The only other party that is identified in the income tax law as liable for the payment of any income tax is revealed in 26 U.S.C. § 1461:

    "Sec. 1461. Liability for withheld tax
    "Every person required to deduct and withhold any tax under this chapter is hereby made liable for such tax and is hereby indemnified against the claims and demands of any person for the amount of any payments made in accordance with the provisions of this chapter."

    "This chapter" is "Chapter 3 - Withholding Tax on Nonresident Aliens and Foreign Corporations". Thus the liable party in this instance is anyone withholding tax on nonresident aliens and foreign corporations.

    There are no other references in Subtitle A (the income tax law) to anyone being liable for the tax imposed by § 1 other than those: partners (but only in their "individual" capacity); certain large partnerships in certain excess credit situations; foreign corporations; and those withholding taxes on nonresident aliens and foreign corporations.

    There is only one other party that is identified as being liable for the income tax, but to find that party we have to journey outside the realm of the income tax law to "Subtitle C
    – Employment Taxes", where we find:
    "Sec. 3403. Liability for tax
    "The employer shall be liable for the payment of the tax required to be deducted and withheld under this chapter ["Subtitle C – Employment Taxes; Chapter 24 – Collection of Income Tax at Source on Wages"], and shall not be liable to any person for the amount of any such payment."

    Thus, the only persons being assigned any liability for the income tax imposed by § 1 are those five instances — partners, certain large partnerships, foreign corporations, withholders of taxes on nonresident aliens and foreign corporations and those employers required by Chapter 24 of Subtitle C to withhold taxes on employees.

    The absence, or near absence, of a statutory provision specifying exactly who is liable for a tax imposed is not customary. 26 U.S.C. §§ 2032A and 2056A specifically state who is liable for the Estate Tax; 26 U.S.C. § 3102(b) specifically states who is liable for the FICA tax;: 26 U.S.C. § 3202 specifically states who is liable for the Railroad Retirement Tax; 26 U.S.C. § 3505 specifically imposes liability for Employment Taxes; 26 U.S.C. §§ 4002 and 4003 specify not only who is primarily liable, but who is secondarily liable for the Luxury Passenger Automobile Excise Tax. See also: 26 U.S.C. §§ 4051 and 4052 (Heavy Trucks and Trailers Excise Tax); 26 U.S.C. § 4071 (Tire Manufacture Excise Tax); 26 U.S.C. § 4219 (Manufacturers Excise Tax); 26 U.S.C. § 4401 (Tax on Wagers); 26 U.S.C. § 4411 (Wagering Occupational Tax); 26 U.S.C. § 4483(Vehicle Use Tax); 26 U.S.C. § 4611 (Tax on Petroleum); 26 U.S.C. § 4662 (Tax on Chemicals); 26 U.S.C. § 4972 (Tax on Contributions to Qualified Employer Pension Plans); 26 U.S.C. § 4980B (Excise Tax on Failure to Satisfy Continuation Coverage Requirements of Group Health Plans); 26 U.S.C. § 4980D (Excise Tax on Failure to Meet Certain Group Health Plan Requirements); 26 U.S.C. § 4980F (Excise Tax on Failure of Applicable Plans Reducing Benefit Accruals to Satisfy Notice Requirements); 26 U.S.C. § 5005 (Gallonage Tax on Distilled Spirits); 26 U.S.C. § 5043 (Gallonage Tax on Wines); 26 U.S.C. § 5232 (Storage Tax on Imported Distilled Spirits); 26 U.S.C. § 5364 (Tax on Wine Imported in Bulk); 26 U.S.C. § 5418 (Tax on Beer Imported in Bulk); 26 U.S.C. § 5703 (Excise Tax on Manufacture of Tobacco Products); and 26 U.S.C. § 5751 (Tax on Purchase, Receipt, Possession or Sale of Tobacco Products), to name a few.

    Considering the "standard in the drafting of taxation laws industry", particularly in view of the requirement of strict construction, the limitation of liability to those five instances cannot be assumed to have been an oversight. In this instance the only ones liable are those specifically named as liable, just as in any other tax provision.