Wednesday, 26 September 2012

The Real Trickle-Down Situation

Millionaire Joe owns a company and pays his taxes on the revenue.  He'd be the first to admit that he takes every single credit, and off his profit.....he pays roughly nineteen percent on taxes.  He donates money to charities and fine foundations which help kids in trouble.  Joe is happy paying the nineteen percent.

Well....time passes, and some folks decide via Congress that Joe ought to pay an additional four million dollars (figure seven percent on top of the nineteen percent).

Millionaire Joe typically paid out bonuses to his staff of six hundred employees.  They ranged from $60k to $500 (the seven security guys all got $500 each).  Joe figures up the mess, and decides the extra four million will come from the bonus deal.

The Chief Finance Officer got the $60k bonus....which he typically used half on two trips to Vegas each year.  The CFO would fly him and his girlfriend into Vegas, hire up a fancy limo, stay at a luxery five-star place and really have a great time.  The $30k spent on Vegas?  Gone.  The limo driver?  He lost two big-ticket moments from his 300-day calendar.  The hotel?  They have to hope for a replacement for the two lost weeks in the five-star hotel room.

The IT technican Bob?  He took home a $4k bonus.  He typically put it onto renovating his house.  This year?  No renovation....no upgrades....no purchases from Lowes.....no carpentry work for Bobby Joe from across the street....and no paint purchase from the fancy paint shop downtown.

The secretary Wilma?  Well....she'd take home $2200 on her bonus.  It was going to pay for a new living couch and easy-chair.  The local furniture company would have made profits off the $2200, and the local county/city would have made 5.25 percent taxation revenue off the purchase.  They all lost on their "deal".

The engineer Karl?  Karl was set to buy a $17k bass-boat, and spend $1k on his wife's new fancy washing machine.  The bass-boat company lost a purchase, and Maytag lost a easy sale.

The logistics guy Monroe?  Well.....he was set to fly out to Thailand, visit some ladies and choose one to be his next wife (number three).  The $6k would have taken care of everything.  Now?  The Thai trip is pushed off for a year, and the Thai Airways folks lost $2k because of the lost bonus.  Oh, and some Thai gal lost her golden chance to marry up with a oddball character who drinks only Schultz beer and Kool Aid.

The crazy manager from the developmental group....Teddy?  He was set to pick up a $17k bonus, which would have paid for a truckload of stolen nuts and bolts from a Missouri middle-man.  The guy who stole the truckload of nuts and bolts now has to wait a month while hunting down some other guy to buy a hot load of nuts and bolts.

The four million?  Well....it went into the government's hands and pays for some government service, which none of the guys or gals mentioned....ever see.  All they know....is that they had a bonus, and now they don't.

The truth is....when you squeeze a millionaire for more money...he has to take it from somewhere.  And typically, if it's in the government hands....it doesn't mean that real people ever get any use out of it.

Sequestration

In the last couple of days....there's been more interest building on this whole sequestration business.  Some economic experts have come out....and some political figures are hinting at various things.

The number today of concern....that 108k DOD civilians.....not contractors, but regular civilian workers....would end having to go.  It's even pointed out that you can delay this into March/April of 2013, but it just means some serious numbers have to occur quickly by May.

There's also this hint that some Republicans actually want Sequestration to occur....mostly because they see President Obama winning, and don't desire any tax increases onto the public.  The general thought by the rest is that you could cut around the edges....mandate furloughs on government employees....increase taxes to some degree....force mandatory retirement for folks with enough points, and just slide by with minimal forced layoffs for the rest.

My humble opinion is that we will see ten days of discussion after the election.  If Romney wins....the Republicans will come to the baseline and agree some basic tax increases, and then get a four-percent work-force reduction for 2013 (much better than the thirteen percent that sequestration is discussing).  You drag out some retirement papers for the older guys and offer up $25k for some guys to resign, and you somehow avoid a mess.

If President Obama wins....I think the ten days of discussion will be worthless, and then Senator McCain gets a four-month extension into the mess....taking us to the end of April 2013.  We then find almost no compromise with the Republicans and a magnificent ten thousand ton anchor is going to be released in May.  Tens of thousands of notices will go out, and by the end of May....the cuts start.  The economy will falter by ten percent, and 401k funds across America start to fall miserably beyond what people expected.

My suggestion for people if you have investments or 401k deals....and President Obama wins....I'd start to discuss the idea of bonds or just buying into some CD deal for two years.  I wouldn't expect much from the US economy until 2016.  The blame?  It'll try to stick to the President, but it's mostly the fault of those in Congress and the Senate.

Property prices around DC?  Well.... mortgage failures will show by the end of 2013, and I'd expect some great fire-sales on property by early 2014.  Guys in the DC area who get unemployed?  You'd best pack a bag, give up on any real salary deals for six months, and just head out to Wyoming or North Dakota.

I'm trying to be optimistic on sequestration.....but it's funny how you get this little hint or two that some Republicans just aren't going to sign up for nothing much.

The Communist Half-Time Show

This is what we know.

There's a high school band up in New Oxford, Pennsylvania.  This year, they got all busy and put together a show....Saint Petersburg, 1917.  The reference here....is that this was the big year where Communism showed up in Saint Petersburg, Russia....dissolving away reality in the local area....and changing Russian lifestyle.

So the band had red flags, military-style uniforms, and the hammer & sickle were the key symbol leading the band.

No one much said anything within the group.  It wasn't until they did some practice episodes for their half-time show that some parent stood there in shock and realized they were celebrating Soviet Communism within the half-time show practice.

Naturally, the school board gets involved, and eventually....this directive gets passed down.  You can play the music, call it "Music of Shostakeovich" and dump the hammer/sickle episode entirely.

So far, no one with the band will say much. The school music teacher?  I'm guessing there was some strategy at work here, and folks might be curious to hear more about his or her philosophic nature. If this had happened in Bama or Mississippi....the music director would have been suspended for a week or two....but this is Pennsylvania.  

I'm guessing if no said nothing over the entire season....it would have been easily accepted for the band to move on for the 2013 season with some Nazi-like half-time show.

For a year or two....this will be discussed around New Oxford and folks will comment on the fancy uniforms, the Russian theme, and who directed what to happen.  Eventually, it'll be forgotten for a decade or two, until some kid who was in the high school band....returns as the next music teacher and band leader.  Things tend to repeat themselves.

Thunder-Blizzard-Hurricane

I rarely comment on football. To be honest, I might watch one game a weekend during the season.  I did end up catching part of the Seattle - Green Bay game on Monday night, which ended being one of the discussed games at the office in recent history.

The NFL is apparently on this bad situation with replacement ref's because of a pay discussion going on with the "real" refs.  The replacement refs showed up at the game, and probably delivered one of the worst games in NFL history.  You could have done just as good by drafting up eight US Senators and just putting on the field to call the game.

By the next day....NFL headquarters kinda agreed, the Green Bay squad should have won....but history has been written.....Seattle won instead.

Course, this all got Green Bay folks upset.  Last night, the local weather station ran a piece with a replacement weather guy.....who promptly issued out a weather warning of a thunder-blizzard-hurricane on the way, then predicted morning temperatures at minus-200 degrees.  The real weather guy then stepped in, kicked the replacement guy out, and corrected everything.  I'm guessing some guys are probably still asking if the thunder-blizzard-hurricane warning is still in effect....if they should evacuate to Michigan....and if they ought to go ahead and put snow-chains on.

In a bad situation, it's good to have a sense of humor about things like this.  To be truthful....the minute you get into an argument, and management pulls out a replacement crew....things generally go downhill fast.  The odds of the NFL bringing back the real refs by this weekend?  I'd take a guess at fifty-fifty at this point.  There's probably some pressure building on the issue, and at least a hundred phonecalls a day coming into the commissioners office.

As for the thunder-blizzard-hurricane?  If there was such a thing, it'd be best to pick up several cases of Pabst-Blue Ribbon beer, as many packs of hot dogs as you can carry, and get a decent snow shovel.