Tag Archives: Wall Street

Private meetings with Investment Professionals Inappropriate; Attendees Acquire Valuable Nonverbal Information

The Washington Post had an article describing how political intelligence firms are setting up meetings with staff members of the White House in order to provide ostensibly public information to interested persons in private meetings. These meetings also occurred with congressional staff. All of it is inappropriate, as nonverbal information is also given out at these meetings; information that would not show up on transcripts, yet is very valuable to these elites. No normal citizen, without significant personal wealth or political connections, would be able to have such access.

These private meetings with investment professionals with congressional staff and now White House staff are not innocent or just taxpayers seeking information. These meetings are an thinly disguised effort to gain nonverbal information not available to the public. If all these Wall Street staff wanted is public information, why do the appropriate press offices of the various government offices just provide a link to the information on their websites? Why are not these discussions of public information video recorded and posted publically so that all taxpayers may benefit?

This type of meetings must end because the information provided at the cost of the taxpayer is only provided to a select few elites to make a huge profit or gain advantage over others.

 

 

Willard Mitt Romney: “Free Enterprise” Proposal Is a Proxy for Long-Held GOP Views

[Update: November 12, 2012--President Barack Obama has won a second term over challenger Mitt Romney.]

In Willard Mitt Romney’s speech to the NAACP, essentially presented a summary of his Presidential objectives, called his “free enterprise” approach. The plan sounds like a neutral listing of long-held GOP positions. It seemingly worked in part as some in the NAACP audience actually applauded for some of it.

Willard Mitt Romney “Free Enterprise”* Proposal Comment
1.  Approve Keystone Pipeline  One million jobs?
2. Open new markets for American goods => “clamp down on China”
3.  Reform Social Security and Medicare (in part by means testing the benefits) This idea is an attempt to avoid the easiet solution–raise the cap on the FICA tax. See this post. Would not be surprised if the full program took ideas from the “Third Way” think tank.
4. Nurturing skilled workers  Is this a call for more H1-B visas?
“5. Restore “”economic freedom””*(a)  High taxation(b) unnecessary regulation(c)  High health-care costs(d)  Destructive labor policies” I think these charges terms means—more tax cuts, eliminating agencies or regulatory authority, high-deductible health plans, and elimination of the remainder of labor unions (that is, union busting).

* Term not defined by Mr. Romney.

Federal Pensions: Third Way Was Able to Increase FERS Contributions; Congress Directed Extra Monies to Unemploment Extension

Because of the way that the Civil Service Retirement and Disability Fund (CSRDF) is set up, when federal employees contribute more (without an increase of the pension benefit), they actually are paying that money to the Treasury. In the case of the recent new law (P. L. 112-96, title V), this money is going to pay for an extension of unemployment benefits (and not an increase in pension benefits). So, basically, federal employee pay was effectively cut back.

The group, Third Way,  still has influence. It asked for a 5.2% increase of employee’s contributions; the Congress delivered 3.1% not only for the civil service but all participants of the Federal Employees’ Retirement System.

[The crocodile tears of Minority Whip Steny Hoyer and Representative Chris Van Hollen (member of the so -called supercommittee) did not affect me at all, except to make me marvel at their skills of "gaslighting."]

“Occupy” Demonstrations: Nonviolent Protests Sometimes Provokes an Unjustifiably Violent Police Response

I have observed the slow growth of the Occupy Wall Street movement and its offshoots over the past several weeks. I do not camp out in a park, but I do understand the frustration and support their efforts as a result of the startling presence of long-term unemployment, paucity of jobs, and sense of financial instability (if you are not part of the top income brackets).

The Occupy movement has generally been a nonviolent demonstration. Recently, some city governments and their police departments used health and safety concerns to break up the camps (for example, New York City, and Oakland).

UCDavis is an institution of higher education, and the people who were sprayed appeared to be college aged (18 through 20s); perhaps given the educational environment, the UCDavis Police Department and the protestors could have discussed their way out of the confrontation. Instead, the video of the discharge of pepper spray is on display along with the fallout.

In these days in which law enforcement officers have been tasked with anti-terrorism projects, where does responding to nonviolent domestic demonstrations fit? In the District of Columbia, the OccupyDC movement seems to be working with the D.C. police department.

At University of California, Davis, in contrast,the response was the use of nonlethal violence (pepper spray) in response to anonviolent demonstration. The officer sprayed the chemicals into people’s faces without any compassion; the police could have simply arrested the folks (who were apparently sitting in an act of civil disobedience).

While the video provoked a reaction, the event should be a lesson for all about how, when, and why law enforcement agencies should use differing levels of force. Pepper spray is not appropriate in all circumstances.

FICA: President Barack Obama Seemingly Is Using the Payroll Tax Cut as a Way to Weaken Support for FICA-Funded Programs; President Should Use General Funds to Provide Needed Economic-Crisis Assistance

President Barack Obama’s proposal to extend the Federal Insurance Contributions Act (FICA) tax cut harms the idea that FICA is a special-purpose tax to fund Social Security and Medicare. I feared the President’s proposal last year, knowing that his further proposals to extend would happen. Currently, the Congress requires the Treasury to arrange for an equivalent amount of cash to go to FICA-funded programs, which makes up for the “loss” due to the FICA tax cut. [P.L. 111-312, sec. 601(e)]. This tax cut seems to be a neat way of having the increase (not much ($934 on yearly average)) of cash to the citizenry, while having the Treasury ensure that the contributions to the FICA-funded programs are not reduced.

However, what the President has done is introduce the idea that the FICA tax is not a special-purpose tax for Medicare and Social Security, but rather the notion that FICA can be used for general current-revenue purposes. This change is subtle but very dangerous. While the current President can be said to support Social Security and Medicare, this very same FICA tax cut could be used to force cuts or substantially change both programs (by a future President who can be said to be opposed to FICA-funded programs). Therefore, I became seriously concerned when the so-called Democratic President used a GOP talking point to attempt to shame GOP congressional members to support an extension of the FICA tax cut (emphasis below mine).

Pass this jobs bill, and the typical working family will get a $1,500 tax cut next year.  Fifteen hundred dollars that would have been taken out of your pocket will go into your pocket.  This expands on the tax cut that Democrats and Republicans already passed for this year.  If we allow that tax cut to expire — if we refuse to act — middle-class families will get hit with a tax increase at the worst possible time.  We can’t let that happen.  I know that some of you have sworn oaths to never raise any taxes on anyone for as long as you live.  Now is not the time to carve out an exception and raise middle-class taxes, which is why you should pass this bill right away.  (Applause.)

The President is seemingly using the economic crisis as a way to begin the process of breaking the overwhelming popular support of the FICA-funded programs. The issue that some wealthy politicians face is the enduring support of FICA-funded programs. Because of how the U.S. manages its cash–using FICA funds in general revenues and issuing a nonmarketable Treasury bond (a promise to repay) in exchange for the cash–general revenues that are artificially low (due to the FICA borrowing) will have to be increased in order to pay the bonds redeemed by FICA-funded programs when the number of beneficiaries exceeds the proceeds collected from the FICA tax.

The President, when he deals with FICA-funded programs, must be carefully observed.

Deficit Committee: Sunlight Foundation, Half in Ten Publish Information about Members of Deficit Panel

I think that it is beneficial to get as much information about the politicians elected to represent the citizens of the United States. I have used information from the Open Secrets website to see the net worth of the members of the Joint Committee on Deficit Reduction (JCDR)  and other members of Congressional leadership.

Now the Sunlight Foundation has added another piece of information on fundraisers; the website, www.halfinten.org, has published demographic information about the congressional districts of the individual members of the JCDR.

Third Way: Evaluating Group’s Document “Saving Social Security”; Chain-Weighted CPI has Cumulative Negative Effect in the Future

Continuing on with the evaluation of the Third Way document “Saving Social Security”, I’ll begin with more-accurate cost of living increases. Third Way proposes that Social Security use a chain-weighted consumer price index.

  • I’m not so sure that I agree with this change because of the cumulative negative effect. In addition, if a change is overly complicated, the safest way of dealing with the issue is to reject the proposition.
  • None of this would have been needed if the FICA surplus was kept as cash on the government’s books. As the FICA funds were borrowed (as represented by the nonmarketable Treasury securities in the “trust fund”, those funds were known to be obligations to be repaid. I call them a patriotic citizen’s loan. Should the political elite decide not to repay that loan, only horrible consequences will follow.

Third Way: Evaluating Group’s Document “Saving Social Security”; Proposed Increase to Low-Income Seniors Not Worth the Effort (Net Increase Low)

It’s galling to hear all of the ideas coming forward about the Social Security and Medicare programs as these are not appropriated programs. These programs are funded by the people of the United States through the Federal Insurance Contributions Act (FICA) tax.

The people’s problem is not with the programs but with their politicians who have diverted the “trust fund” monies (take the cash from the tax assessment into the general funds, then Treasury issues a nonmarketable bond for that amount and puts it into the Social Security trust fund). When the Baby Boomer generation was in their active working years, there was a lot of money in the Treasury. Given the composition of the U.S. government revenues, the amount of money that was seen as excess may have been from FICA monies. If that were the case, the money should not have funded “tax cuts” or any other programs unless a method of repaying the funds was known.

The government did not preserve the excess funds to provide for the inevitable cash-in period occurring now, and so now there are calls to address the need for cash as the nonmarketable bonds are being reached to fund Social Security beneficiaries. One way is to raise revenues on those who received cuts based on the excess FICA monies. The group Third Way proposes another confusing, complex, and ultimately unhelpful solution geared to undermine confidence in the programs while using magnificent words to describe the program. I hope to evaluate each major point the Third Way group identifies in its documents over future posts. I’ll start with their first point.

  • Change formula to increase benefits for low income seniors (that is, to change primary insurance amount from 90% to 95%, decrease it from 32% to 31% in the middle bend point, and from 15% to 12% in the third bend point). This solution is complicated and does not net much money to be worth the change. The increase provided by 95% of $749 is not that much more (0.9 x 749 = 674.1; 0.95 x 749 = $711.55. The result:  711.55 – 674.1 = 37.45 (increase). Thirty seven dollars and some change would not go very far with today’s cost of living.

Deficit Committee: House Minority Leader Selects Members for the Panel; Possible the Leadership Will Work Secretly to Drop Plan for Final Consideration

House Minority Leader Nancy Pelosi selected Reps. Xavier Becerra, James Clyburn, and Chris Van Hollen for the congressional Deficit Committee.

I think given the composition of the committee (the leadership selected their representatives to the panel), if it is to work the leadership will have to continue their talks with the President in secret. This way they could work on a “fait accompli” plan for consideration of the so-called super-committee. The last thing any leader would want is for their subordinates to come up with a passable plan when the leadership could not.

I further think the leadership will develop the plan and drop it to the committees as stipulated in the Budget Control Act.

Joint Select Committee on Deficit Reduction

Selections of Senator Harry Reid, Senate Majority Leader

Nominee

Net Worth (2009)

Sen. Max Baucus (D-MT) $13,013 to $204,000
Sen. John Kerry (D-MA) $182,755,534 to $294,869,059
Sen. Patty Murray (D-WA) $449,017 to $1,185,000

Source: www.opensecrets.org.

Selections of Senator Mitch McConnell, Senate Minority Leader

Nominee

Net Worth (2009)

Sen. Jon Kyl (R-AZ) $519,090 to $746,082
Sen. Rob Portman (R-OH) $5,544,075 to $17,468,999
Sen. Pat Toomey (R-PA) $1,770,062 to $4,900,999

Source:  www.opensecrets.org.

Selections of House Speaker John Boehner

Nominee

Net Worth (2009)

Rep. Dave Camp (R-MI) $2,966,100 to $10,515,000
Rep. Jeb Hensarling (R-TX) $928,025 to $2,270,000
Rep. Fred Upton (R-MI) $7,010,173 to $25,651,000

Source:  www.opensecrets.org.

Selections of Nancy Pelosi, House Minority Leader

Nominee

Net Worth (2009)

Rep. Xavier Becerra (D-CA) $100,054 to $1,424,999
Rep. James Clyburn (D-SC) $212,010 to $582,000
Rep. Chris Van Hollen (D-MD) $148,007 to $445,000

Source:  www.opensecrets.org.

Deficit Committee: Senator Mitch McConnell and Speaker John Boehner Select Additional Members for the Committee

The principals (Sen. Harry Reid, Sen. Mitch McConnell, Speaker John Boehner, and Rep. Nancy Pelosi) could not reach an agreement with their discussions with the President. I do not expect their selectees will find one (unless proposed, approved, and submitted to the so-called super-committee (maybe on 10/14/11? (see BCA section 401(a)(3)(A)(ii)).

The number of millionaires who are on the congressional committee and would be subject to tax increases make me skeptical about the results of this super-committee.

Joint Select Committee on Deficit Reduction

Selections of Senator Harry Reid, Senate Majority Leader

Nominee

Net Worth (2009)

Sen. Max Baucus (D-MT) $13,013 to $204,000
Sen. John Kerry (D-MA) $182,755,534 to $294,869,059
Sen. Patty Murray (D-WA) $449,017 to $1,185,000

Source: www.opensecrets.org.

Selections of Senator Mitch McConnell, Senate Minority Leader

Nominee

Net Worth (2009)

Sen. Jon Kyl (R-AZ) $519,090 to $746,082
Sen. Rob Portman (R-OH) $5,544,075 to $17,468,999
Sen. Pat Toomey (R-PA) $1,770,062 to $4,900,999

Source:  www.opensecrets.org.

Selections of House Speaker John Boehner

Nominee

Net Worth (2009)

Rep. Dave Camp (R-MI) $2,966,100 to $10,515,000
Rep. Jeb Hensarling (R-TX) $928,025 to $2,270,000
Rep. Fred Upton (R-MI) $7,010,173 to $25,651,000

Source:  www.opensecrets.org.