Sunday, October 30, 2011


I am the 98%.

I don’t squat in parks. In fact, I try to be a good neighbor by not beating drums at all hours. I don’t ask to use my neighbor’s bathroom facilities, either, unless, of course, it’s an emergency.

I try to pay my bills on time. I try to make good financial decisions. Sometimes, I don’t, and I have to pay the consequences. That’s okay, because we all make mistakes. I just try not to ask other people to pay for them.

Am I hacked off at the way things are now? Yeah. I’m angry that people who thought they were achieving the American Dream were led down a yellow brick road to financial ruin by promises from mortgage companies and student loan officers, who were, in turn being pressured by the government to make bad loans, all in the name of “equality’ and “fairness.”  I’m royally ripped that a lot of those folks – the Fannie Mae and Freddie Mac ones, in particular – don’t seem to be getting the same serving of guilt heaped on them as others are.

And I’m really, really stunned that a lot of the “99 percenters” say they still plan on blindly voting for the characters who either got us into this mess or made it worse.

What do I do when I get mad at policy makers? I don’t grab the chance to relive the Sixties. I get involved. I educate myself about the issues – and not just from organizations that support my political leanings. I don’t like conspiracy theories that make easy connections between a causation and something that has no real, profound effect. Conspiracy theories are for dunderheads or mystery writers.

No, when I’m ripped about something in this democratic republic, I call or write my elected officials. I get like-minded folks to do the same. I participate. I vote. I don’t wallow.

I’m the 98% out of the 99%--in the same income bracket, yeah, but not the same mental zone as the 1% occupying parks. Not. At. All.

Tuesday, October 25, 2011

Deconstructing the Smoking Cain Ad

by Libby Sternberg

First, the visuals and the sounds: The chiaroscuro contrast of shadow and light, the gray tones that suggest foreboding but also promise--one walks from shadow to light, after all--the wearied stare of our narrator into the camera as if to say, "We're all weary, aren't we?" as haunting yet upbeat music comprised of a simple few notes against a techno-beat begins to play....

It all combines to create an aura: something different is happening here, pay attention.

And so, we do.

Then he speaks. He tells us his name but so quickly that we must listen again or look it up. He makes us wonder--Is he an actor or a real person? Is he who he says he is?

This, of course, is the critical question in any political campaign: Is the candidate who he says he is? A stroke of genius to plant this visceral question early in the minds of the viewers as a subtext to what will come, thrumming in the background as steadily as that techno-beat in the simple, nonaccostive music that seems to whisper: I will not hurt you.

On to the script: Mark Block, our narrator, starts with history, his history: "Since....January..." he informs us, he's been Herman Cain's chief of staff. But there's a world in those ellipses, that small pause, as if he's storing up the wondrous things he wants to share, deciding at that very moment to tell the universe about this magical experience working on Mr. Cain's campaign.

He tells us this is a campaign "like nobody's ever seen" -- another touch of lightning-fast verisimilitude, joining the narrator to the common bonds of humanity, eschewing a more elegant construction ("Nobody has seen a campaign like this"), opting instead for the barroom banter of the working man, conjuring up images of a victory whoop and beer held high while football friends-of-the-moment share triumph looking together, communally at the high-def images on a megasized flatscreen TV. Any given Sunday, that construction says to us all, I am one of you, Herman Cain is one of you.

But we are fickle viewers, are we not, ready to turn away at the briefest glimpse of the Most Interesting Man in the World or to the compelling lure of the skillets blacksmith with his seductive "mmm," urging us to "smite" the pan of pasta, "smite them with the liquid gold until there can be no more smiting..."

I digress.

Our friend, our singular vox populi, continues with his simple declarations, the camera providing enough movement to keep us watching, moving here, there, placing our narrator to the left of the screen -- the left! another brilliant stroke signifying "come hither, ye discouraged and disappointed liberal-minded independents, Mr. Cain speaks to you, as well!"

And then, the coup de grace, the moment when Mr. Block--Block, how serendipitous a name, telegraphing ordinaryness, neighborliness, orderliness, simpleness, comfortableness, kindnessness--as the music surges, voices joining the chantlike melody, proclaiming "I am America"--at that moment, as a visual fermata over the word "America," Mr. Block becomes the rebel within us all--he inhales a cigarette!

Were we not a country born of rebellion, our inner Minute Men howl? Have we not all fought against the stifling forces of conformity and raged against the machine of even more conforming conformity, our hidden Don Drapers keen?

But there's more. He doesn't just inhale. In a puff of utter genius, he exhales as well, his eyes blazing with the message: "I won't back down. Neither should you. I am America." A universal message for that blue-collared fan. He's telling us with that nonchalant whiff, the smoke lazily blowing toward the screen, toward us, toward our very souls, toward the heart and soul of America itself: "Do not be afraid."

Then the obligatory image of the candidate appears. By now, we've been waiting and wondering--who does this mysterious, unpolished Everyman speak for? Let us see him. Let us judge for ourselves. Bring him to us so that we might judge him. Is he worthy?

His face at last, serious at first, but with a shine in his eyes that makes us want to like him. Should we like him? Should we give him a try? Has Mr. Block told us the truth "like nobody has seen" before, or was this yet one more slick charade, designed to keep us from seeing beyond the veil of predatory politics?

Sunshine cuts the chiaroscuro! Mr. Cain smiles, slow and easy, a smile that dispels the gray and brown tones of the ad (and also, one must hope, of Mr. Block's lungs), and we are left basking in the optimism and exuberant stolidity of this beguiling man.

But don't take my word for it. See for yourself:

I hope this analysis satisfies all those who have been searching for the ad's deeper meaning.

Perhaps this is a good place to mention that I'm a novelist and write romantic comedy, among other things.

Wednesday, October 19, 2011

I'm the 99 Percent,
But You Don't Speak for Me

by Libby Sternberg

Supporters of the Occupy Wall Street crowd have been posting signs on Facebook. That is, photographs of people holding signs with their "stories" on them. These tales are usually some variation of "I am an average guy/gal who tried to do everything right and now I've got tons of debt and can't find a job." Some tell of losing their houses or practically going bankrupt when serious illness hits them without a health insurance coverage safety net.

While these stories generate a painful pang of sympathy--no one likes to hear of others' hardship -- they also stir in me a sense of befuddlement.

As sad as these tales are, they're all, more or less, confessions of mistakes, big life-altering mistakes. So it bewilders me why these sign-makers would want to share these embarrassing stories with the world. Surely they must know that even the most sympathetic readers probably silently ask questions like these:

Why did you rack up so much college debt?
Why did you choose a major in a field with few employment opportunities?
Why did you forgo buying a high-deductible/low-premium health insurance policy?
Why did you take out a mortgage, or refinance one, with little to back it up?

I know, I know -- some of these storytellers would argue that when they made these mistakes, the economy was strong, and they expected to be able to land jobs, get health insurance from an employer, and pay off their debts responsibly.

I'm sorry you are having trouble.
I'm a writer, too. It doesn't
always pay the bills.
Even if we are
 in the "99 percent"
income bracket together,
you don't speak for me.
That part of the tale has a "there but for the grace of God, go I" quality to it that everyone can relate to. We all make mistakes. We all take on debt. Heck, I was a music a conservatory, no less.

But that's where the differences start. Although my parents paid for my degree,  I knew I'd have a hard time finding work in my field, which was highly competitive, when I graduated. I knew I'd have to make tough choices if I wanted to stay in it. Eventually, I chose another path.

So I understand "mistakes" (although I don't look at my music conservatory days as a mistake; music study enriched my life immeasurably in other ways). Everyone understands mistakes.

But not everyone takes to the streets with the implied message that these mistakes--no matter how well-intentioned the original goals were at the time--are someone else's fault, or that someone else should pay for them.

Not everyone points their finger at those who are doing better than them and says "you're to blame; your wealth makes me poor."

So please don't say you speak for the entire "99 percent" who aren't mega wealthy when you broadcast your mistakes and your implied message that others are to blame and should pay on your behalf.

I've made my fair share of mistakes, too, and haven't blamed the wealthy or Wall Street or corporations or capitalism in general. You don't speak for me.

Tuesday, October 18, 2011

The President's "Fair Share" Is a Red Herring

by Joseph Sternberg

President Barack Obama is running around the country, saying that it is time for millionaires and billionaires to pay their "fair share" of taxes. His purpose is to persuade voters that if millionaires and billionaires did pay their "fair share" there wouldn't be any deficit problem and no need to cut expenditures.  Increased  expenditures is central to President Obama's objective to redistribute the wealth. His claim is a red herring because assuring that the wealthy pay their "fair share" of income taxes would do little to erase the massive deficit. Making  "fair share"  the issue diverts attention from the critical problem of reducing expenditures.

Well of course that depends on what is "fair share"? This is not a new question. It was decided politically a long time ago in specifying a progressive tax rate schedule. Almost since the beginning of time, this schedule has been progressive in calling for payment by high earners of a higher percentage of their income in income taxes. This has had bipartisan support. So there is a long legislative history that tells us what the people consider to be "fair share."

I use the IRS tax data for 2008 which is readily available.The data show that the actual payment of income taxes for different income levels is not progressive. For whatever reason, myriad provisions have been written into the tax code to shelter income. Some provisions undoubtedly have a desired social objective. The progressive tax rate schedule reduces the incentive for class warfare which is an important plus. Sheltering the income of high earners from income taxes is an encouragement to class warfare.

We must not let Obama divert attention from the need to reduce federal expenditures. In 2006,the ratio of expenditures to GDP was about 20%. For 2011, this ratio is estimated to be 25%, where the estimated GDP for 2011 is 15.1 trillion dollars.To cover an expenditure ratio of 25% would require an additional $780 billion dollars in taxes.

There is certainly a case to be made for increasing the average tax rate for the top 0.1% of taxpayers (millionaires and billionaires) from the current rate of 23% to 34%, the rate envisioned by the tax rate table.This is close to a 50% increase in their income taxes, or about 50 billion dollars. Well, that is only 6% of 780 billion dollars.

Now the IRS tax data show that the top 1% of taxpayers would have to pay more to correspond to the rise in tax rate with income level. You get in this group if your income exceeds $380,000 well below the millionaire level. For the top 1% the tax rate specified varies from 28% at $380,000 to 34% at the top of the group. Suppose we assume that the average paid should be 31%, halfway between 28% and 34%. In 2008, this group paid 392 billion dollars in income taxes, an average rate of 23% of their AGI. If the average rate was raised to 31%, that would increase taxes by 35% or 137 billion dollars. This is 18% of 780 billion dollars. Expenditures would still have to be reduced by 643 billion dollars to get federal expenditures back down to their historical level.

"Fair share" is a red herring to divert attention from what must be done to reduce expenditures by an amount that would get the deficit under control. At the same time, the almost impenetrable tax code needs to be modified so that the progressive objective of the tax rate schedule is satisfied for the top 1% of taxpayers. We don't need class warfare to add to our troubles.
Joseph Sternberg
Retired Professor of Physics

Naval Postgraduate School, Monterey, CA

Friday, October 14, 2011

The Oracle Hypocrite of Omaha
(With Poll Question!)

by Libby Sternberg

Poor Warren Buffett. He's become a victim of Roving Bands of Tax-Loophole-Enforcing Accountants (they wear gigantic green eyeshades instead of ski masks when overtaking their victims, I'm told, and their weapon of choice is the electronic calculator, which packs a mean jolt).

Due to these nefarious bean counters, he pays taxes at a lower percentage than his secretary, even though he is a Gajillionaire, and she is is a working girl. No, not a working girl. A woman who works.

Unable to defeat these evil tax-dodging accountants on his own, he's let out a heartrending cry to the government, asking it to please, oh, please, oh, please, raise taxes on just him, as well as lots of people who make less than him but not as much as his secretary.

His story gets even sadder. Berkshire Hathaway, the company of which he is chairman and CEO, appears to have been victimized by these Roving Bands of Accountants, as well. It has a few back taxes on the books (nothing consequential, mind you, just a mere billion) that it disputes. Don't take my word for it. You can look at the Berkshire Hathaway annual report and find this gem around page 56:

At December 31, 2010 and 2009, net unrecognized tax benefits were $1,005 million and $926 million, respectively. Included in the balance at December 31, 2010, are $774 million of tax positions that, if recognized, would impact the effective tax rate. The remaining balance in net unrecognized tax benefits principally relates to tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. Because of the impact ofdeferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affectthe annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period. As of December 31, 2010, we do not expect any material changes to the estimated amount of unrecognized tax benefits in the next twelve months.

Translation: As of Dec. 31, 2010, Berkshire Hathaway was carrying just over $1 billion in "unrecognized tax benefits." That means they believe the money is a tax benefit they should receive, but the IRS has not yet agreed with them and has not determined a schedule for when payments would be due, so the amount must be carried on their books as a liability. Berkshire Hathaway appears to be pressing hard to avoid having the corporation pay $1 billion in taxes (surely as the result of those wicked bands of accountants holding their calculators to the heads of the executives).

Yes, I know that the corporation is looking out for shareholders--little people, perhaps akin to Mr. Buffett's secretary, who have money invested with Berkshire Hathaway through mutual funds and pensions, etc. But Mr. Buffett's patriotic passion for paying taxes surely would seep into the corporate ethos of his company, Berkshire Hathaway, if it, too, had not been infiltrated by those Roving Bands of Accountants that attacked his own personal wealth, forcing him to pay lower taxes.

Oh, the humanity!

But wait, Warren--help is on the way!

Sen. John Thune (R-SD) has introduced "The Buffett Rule Act of 2011" (S.1676) that would force the IRS to include on tax forms a line asking folks if they'd like to donate to the federal government. Read more about Sen. Thune's nifty plan here.

More good news--poor little rich guy Mr. Buffett need not wait for this legislation to be passed. He can pay more right now if he'd like. We've provided a handy how-to on this blog here. (It has shocked us to learn that he might not read our blog.)

Now that so many efforts have been made on Mr. Buffett's behalf to free him from those tax-hostage-taking accountants, we're sure that he will no longer plea for others to pay more taxes until he's set his own house to rights, so to speak, by paying the amounts he wants to pay (if not for those malevolent accountants) and maybe even paying his secretary's taxes, too, since he's so concerned about her. He wouldn't want to look like a hypocrite, now, would he?

Tell us what you think by answering our poll question in the upper right corner of this blog!

Friday, October 7, 2011

Checking the President's Presser,
and Another Great Response to Elizabeth Warren

by Libby Sternberg

As noted previously, the mainstream press is dominated by liberals, or at least by journalists sympathetic to liberal talking points. So it often surprises me when a major mainstream news source actually does render a dispassionate, nonpartisan take on a political story. Such is the case with the Associated Press, which offers a "fact check" of President Barack Obama's press conference yesterday in which he complained of Republican opposition to everything in his jobs bill and touted previous bipartisan support for ideas he's offering. Hint: both claims are not true. Read the full article here.

Back to Elizabeth Warren, who is trying to win the Democratic Senatorial primary in Massachusetts so she can challenge incumbent Republican Senator Scott Brown for the seat. Ms. Warren made a statement recently that flew around social media and leftwing blogs like, well, a viral post. The original statement can be found in this previous post (along with a parody of the remarks). To summarize: she believes no one in America achieves anything without the help of government-funded programs, which she calls the "social contract."

Conservative columnist George Will demolishes her argument in a very thoughtful, well-reasoned column here.  My fave line: using a William F. Buckley quote, Mr. Will likens Ms. Warren to a "pyromaniac in a field of straw men."

Tuesday, October 4, 2011

Occupying Wall Street

by Leslie S. Lebl

It's very flattering, for this Tea Partier anyway, to hear that the Occupy Wall Streeters believe they are copying Tea Party methods in order to emulate its success.

Aside from the obvious incongruities (no Tea Party event has ever done anything like try to take over the Brooklyn Bridge), there is an even more important difference. Typical Tea Partiers turn out for a specific event - and then go home. But the occupation of lower Manhattan has gone on for weeks. Who is paying those folks to camp out? Don't any of them have jobs or other obligations? Do you think we'll ever find out?

Monday, October 3, 2011

A Modest Proposal

By Leslie S. Lebl

Listening to Herman Cain's 9-9-9 plan has inspired me to propose a winning three-part economic platform which I hereby offer to any Republican presidential candidate.

1. Repeal ObamaCare - assuming the Supremes don't do it first, which would be a wonderful thing. This requires very little effort on the part of the President; all he has to do is say he'll sign any such legislation that arrives at his desk. All the contenders now say that's what they'll do. Getting rid of this legislation will reduce a lot of uncertainty for businesses, which are still grappling with the law's potential effects and weighing whether to offer health benefits to employees.

2. Drill, Baby, Drill! - I'm no expert, but I suspect that opening up new oil and gas fields will probably require legislation in addition to executive orders, since nothing will happen until many of the environmental barriers are reduced to more reasonable levels. Whatever is required, America will benefit from more locally produced energy and the jobs it generates.

3. Fix the mortgage mess - tell the truth about Fannie Mae and Freddie Mac, and then close them down instead of expanding them. We need our housing market back! And the sooner, the better.

With those three initiatives underway, it would be easier to tackle entitlements and debt. Reducing government spending is always going to be painful, but it will be less so if the economy is growing again and tax revenues increase.