The small glass jugs filled with green or gold coloured extra virgin olive oil are familiar and traditional for restaurant goers across Europe but they will be banned from 1 January 2014…The use of classic, refillable glass jugs or glazed terracotta dipping bowls and the choice of a restaurateur to buy olive oil from a small artisan producer or family business will be outlawed…The European Commissions justification for the ban, under special Common Agriculture Policy regulations, is “hygiene” and to protect the “image of olive oil”…”It will seem bonkers that olive oil jugs must go while vinegar bottles or refillable wine jugs can stay.”
At least they’re fiddling with olive oil. It could be a lot worse.
Levi currently spends about $140,000 a year on insurance premiums to cover 25 managerial staff at his business, Consolidated Management, which runs cafeterias at schools, offices and jails. Under the new law, he will have to offer insurance to all of his 102 full-time employees starting in January. Assuming all of them take the coverage, Mr. Levi says the cost of premiums could exceed $500,000. “I’ve never made a profit in any year of the company that has surpassed that amount,” says Mr. Levi, 62 years old. “I don’t make enough money.” He says it makes more sense to drop insurance entirely and pay a penalty of about $144,000…
Epstein, owner of Firstaff Nursing Services Inc. in Bala Cynwyd, Pa., has similar plans. He intends to stop offering health insurance benefits at his home health-care company. Mr. Epstein, 52, employs about 250 workers and currently provides health insurance to his 20 office personnel. If he were to start covering the 100 or so nurses and nursing assistants that work full time, his annual health-insurance costs would jump to roughly $600,000 from the current $100,000, he says. Even if he takes the penalty option, he estimates he would have to pay about $240,000—a cost he doesn’t think his business could absorb. To compensate, he plans to cut the number of hours his nurses and nursing assistants work so they will be considered part-time under the law. He says he will hire more part-timers to ensure patients receive the same level of care. “We’re going to do everything we can in order to stay in business,” he says.
So more and more people are going to have the Page 21 problem. Total disaster.
We utterly fail to understand what’s going on in Washington with regard to the impending tax increases. We know that the administration’s policies put the country ever more firmly on the economic road to ruin, so why have your fingerprints on any deal? Why play along? Don’t vote against a deal, vote present. That way, it will be entirely clear whose policies produced the result. This seems simple. What are we missing?
Pete Ferrara talks about the 1%, the 13% and the 39%. He also discusses a certain 20%, with its 15% and 3%. Finally he reminds us of the 4% and the 25%. Hard to see how this ends well. (He has even more numbers over at Forbes.)
Bonus fun: Thomas Sowell reviews Stephen Moore’s new book.
The Washington Post Co. will pay its 2013 dividends before the end of this year to try to spare investors from anticipated tax increases…Since 2003 investors have paid a maximum 15 percent on dividend income…dividends will be taxed as ordinary income in 2013, the same as wages, so rates will go up depending on which income bracket a taxpayer is in. For the highest earners, the dividend rate would jump to 43.4 percent.
AP: “Warren Buffett’s firm Berkshire Hathaway…is its largest shareholder with an estimated 1.7 million shares.” No comment.
“the wealthiest Americans” already pay more than their “fair share” in taxes. According to the Congressional Budget Office, the top 1 percent of US earners already pay 22.3 percent of all federal income taxes (based on 2009 figures), even though their share of total income earned is just 13.3 percent. The top 2-5 percent of American earners pay 17.3 percent of the total share of federal income taxes paid, even though their share of total income earned is 12.5 percent. The top 20 percent of Americans pay 67.9 percent of total federal income taxes, while their share of total income earned is 50.8 percent.
The navel gazing continues, and panicked Republicans appear ready to do all sorts of things, such as doing a 180 on illegal immigration and so forth. Slow down and think, people. The election was lost by fewer than 700,000 votes in key swing states, and much of that problem was self-inflicted. That’s a reason to change core policy positions? Puh-leeze. A central problem for the Romney team was that their experts wanted to run a fine 20th century campaign. It was obsolete. There were new problems for them (e.g., effective negative micro-targeting), but also new potential solutions. However, as has been outlined in detail by many people, the Romney campaign had big problems with using 21st century technology to its advantage.
Swing voters were not connecting with Mitt Romney and this was known since June at least. No doubt the negative advertising from Axelrod and Co. had a lot to do with this, and it was effective. The War on Women, rapacious Bain Capital, out-of-touch-rich-guy, and so forth. That’s why seeing a competent person who was an actual human being in the first presidential debate in September was such a shocker. By then, much of the damage had already been done.
But that was unnecessary. We live in the age of the internet and social media, so an effective response to the negative ads was both instantly available and cheap. Why wait for September and the debates to make a direct case to people? Why didn’t the Romney campaign arrange for some slots on TV news channels for long-form interviews with audience participation after May 29 and throughout the summer and fall? The White House did its share of livestreamed town hall meetings. For that matter, why not do a weekly “peoples’ press conference” on the internet? “Ask Mitt Live, every Friday at Five.” He could speak for five minutes on the subject of the day (imagine using that forum to discuss Benghazi) and then field questions from voters, friendly and hostile, both in person and via the internet. It seems to us a pretty simple way to connect with people and counter the negative advertising. In the era of twitter and social networking, interactive communication is a powerful tool.
You’d think that MSNBC would give Romney all the time he wanted for free — as long as they could choose the audience and the questions. Now that would have been interesting to watch.
Since the last budget was passed on April 29, 2009, Washington has spent $11.2 trillion and added more than $4.8 trillion to the national debt. With the national debt now over $16 trillion, never before have taxpayers needed a budget blueprint more to guide our nation away from fiscal ruin. Yet, the Senate Budget Committee has failed to produce a budget -– which it is required to do by law -– in over 1,200 days. In addition to not producing a budget resolution, the committee has also failed to hold many hearings, a key tool for Congress to conduct oversight, investigate problems, seek solutions, initiate conversation and debate, and advance an agenda. The Senate Budget Committee held a mere 12 hearings in 2012 – fewer than all but five other congressional committees from both chambers…
The National Football League (NFL), the National Hockey League (NHL), and the Professional Golfers’ Association (PGA) classify themselves as non-profit organizations to exempt themselves from federal income taxes on earnings. Smaller sports leagues, such as the National Lacrosse League, are also using the tax status. Taxpayers may be losing at least $91 million subsidizing these tax loopholes for professional sports…NASA spends about $1 million annually “researching and building the Mars menu.” This year, NASA also awarded $947,000 to researchers at Cornell University and the University of Hawaii to study the best food for astronauts to eat on Mars. Six volunteers will head into a barren landscape in Hawaii to simulate a 120-day Mars mission. In exchange, they receive an all-expenses-paid trip, plus $5,000
Some boring thing happened in May that we’re not interested in talking about, but others have done so. It inspired this from David Brooks: “Romney knows nothing about ambition and motivation.” Eeek! A mouse!!! The election’s over!!! Eek! Don’t you hear us? Eek!!!
The high tax rates of the inflationary 1970s had forced a deadening siege of conglomeration and corporate bloat and resulted in a catastrophic 60 percent decline in the real value of corporate equity. This was the era of palatial new Corporate headquarters, jet fleets, and lavish entertainment budgets all serving incoherent jumbles of unrelated companies that had equity worth less than the sum of their parts. Corporations often had either to splurge or merge to avoid a suffocating confiscation of profits through the interplay of inflation with exalted tax gouges, which could rise to effective rates above 100 percent of real returns.
Conglomerates artfully combined companies nursing losses with companies harvesting profits, thereby muting the impact of the deadly tax regime.But Ronald Reagan’s counter-inflationary supply-side tax policies, coupled with Paul Volcker’s monetary contraction, made these morbid combines dysfunctional…
Between 1976 and 1993, which covers Romney’s Bain Capital years, Jensen calculates that U.S. corporations conducted 42,621 merger and acquisition deals worth a total of $3.1 trillion. Selling firms won premiums of 41 percent, generating $899 billion in constant dollar gains for shareholders (well over a trillion in today’s dollars). Buying firms also gained on average, by increments that increased over the years. Since Bain under Romney was an out-performer, its results were better proportionally.
Harvard economist (later Treasury secretary) Larry Summers speculated that these gains disguised wealth transfers from bondholders, workers, suppliers, and communities. Jensen disproved this charge, showing — in the aftermath of the transactions — sharp increases in capital expenditures, R&D, employment, and share value.
During this period, encompassing the Reagan years, the nation massively led the world in job creation with between 50 and 55 million new jobs, at steadily rising pay, compared to some 10 to 15 million jobs lost. With the U.S. generating jobs far faster than overseas rivals, this restructuring could hardly have caused job losses to foreign countries. We continued to lead the world in job creation, launched the computer revolution, and maintained our manufacturing employment level until the crash of 2000.
The disastrous economic policies of the Nixon and Carter administrations included wage and price controls, accommodation of increasing inflation, and crippling energy policies, which included bizarre price controls. As a result of these and the factors that Gilder discussed, public stocks became incredibly cheap. KKR exploited the opportunity and created the PE industry. This negative article is supposed to show how KKR did horrible things, when it paid shareholders 3x for their stock and restructured a company; in reality, it makes the opposite point.
Corporate executives who never before thought of doing a hostile takeover of a golf partner CEO’s firm were faced with the situation that sometimes not doing so amounted to ignoring their fiduciary obligations to their own shareholders. The results were sometimes strange, but often they were strightforward: buy out existing shareholders at a good premium, restructure operations, and sell subsidiaries that had a better strategic fit elsewhere. One of the ancillary benefits of this movement was that it put all the other boards and CEO’s on notice that they had better clean up their act or they were the next target.
Final point from Gilder’s piece:
If Romney had been listening more attentively when I gave my speech back in 1982, he might have been more cogent in responding to the charges of “vulture” capitalism in later years. I showed that consumer spending is nowhere near 70 percent of the real economy (GDP leaves out all intermediate transactions in the supply chain) and is nearly irrelevant to economic growth (“supply creates its own demand”). I spoke on the centrality of venture capital and the power of entrepreneurs responding to tax rate reductions: “High tax rates don’t stop rich people from being rich; they stop everyone else from getting rich,” I said. “Progressive tax rates don’t redistribute incomes, they redistribute taxpayers…from factories and offices and onto foreign beaches and early retirements,” among other old favorites that still ring true looking across to Europe in 2012. And I made my case that capitalists thrive only by serving others. But at the time, in the early 1980s, I still did not really grasp the deeper sources of the power of venture capitalists and private equity players.
Note: “consumer spending is nowhere near 70 percent of the real economy (GDP leaves out all intermediate transactions in the supply chain) and is nearly irrelevant to economic growth.” Such an interesting point, particularly regarding the Keynesians and their focus on increasing final demand. It’s not at all relevant. The 1980′s takeover boom was about lowering direct operating and SG&A costs and de-conglomeratizing companies that had become bad vessels for innovation and strategic focus. Compare today: Dodd-Frank and the ACA have produced similar corporate sclerosis from uncertainly and added costs, even as they have done almost nothing to address the problems they boast of having cured. Our very own self-inflicted 1970′s again!
We agree with Jennifer Rubin that Mitt Romney is right not to release any additional tax returns. They will just be fodder for endless and contrived stories from now until November. But we’re amused at one aspect of this debate. Knowing the way this crew operates, how on earth could anyone possibly think that Axelrod & Co. haven’t been sitting on the tax returns for a long time now, giddy to use them? No doubt the narratives for the media have already been written, and the Obama campaign is just hoping that enough stupid Republicans can pressure Romney into legitimizing scores of hit pieces on the GOP candidate. Horse stabling costs as a medical deduction? The Horror, the Horror!
Vanguard Group Inc., whose $148.2 billion of Treasuries makes it the largest private owner of U.S. debt, says the nation has until 2016 to contain its borrowings before bond investors revolt and drive up interest rates. “In the absence of a long-term credible plan, we are somewhere around four years away on where the markets are going to say ‘enough is enough,’” said Robert Auwaerter, head of the Valley Forge, Pennsylvania-based Vanguard’s fixed-income group
As the blue state model fails worldwide, the Left seems to be cracking up. Before this is over, the blue states, as well as the feds, are going to waging war against states like Texas and South Carolina. In all likelihood this will not end well. HT: JP
The state Senate voted by a bare majority today to fund initial construction of California’s $68 billion high-speed rail project…
The bill approved by the Senate authorizes $5.8 billion to start construction in the Central Valley, including $2.6 billion in rail bond funds and $3.2 billion from the federal government. Lawmakers tied that funding to nearly $2 billion to improve regional rail systems and connect them to high-speed rail. That regional money was considered necessary to lobby hesitant senators about the project’s potential significance to their districts.
“Members, this is a big vote,” Steinberg said as he opened floor debate on the bill this afternoon. “In the era of term limits, how many chances do we have to vote for something this important and long-lasting?”
Steinberg and other Democrats said the project would create thousands of jobs and make necessary improvements to the state’s transportation infrastructure. Republicans said it is too expensive and relies on uncertain future funding. They criticized starting construction in the sparsely populated Central Valley.
Among Republicans in opposition was Sen. Tony Strickland, who criticized a willingness by the Legislature to reduce spending elsewhere while finding money for high-speed rail. “I think this is a colossal fiscal train wreck for California,” he said.
More good news: “the first leg to be completed — which the Obama administration insisted upon, because it’s the only portion of the route that isn’t undergoing environmental challenges — essentially leads from nowhere to nowhere.”
The correct answer: We’re not in 2009, we’re in 2012, and we have to deal with today’s miserable ecomony. Call it a penalty, call it a tax, call it whatever you like. Taking money out of the pockets of taxpayers when the economy is broken just makes no sense. Job one is to fix the economy so that it creates jobs. The last thing we need (wave 2700 page monstrosity in the air) is a mind-numbing, job-killing law that no one has read and costs a trillion dollars we don’t have.
This piece is interesting despite its title. In a certain sense, the ACA doesn’t really matter, because the country is running out of money and many government programs are going to have to be restructured and reduced. Arithmetic doesn’t lie. How it plays out no one knows. For example, what happens to the relationships among the states if the high tax states generate zero net jobs for the next decade and most of the jobs and economic growth come from places like Texas? It could get very ugly in unanticipated ways.
Mr. Jones is not a purchaser of health insurance. Mr. Jones has therefore manifestly not entered into any commerce. Yet Congress tells him he must buy health insurance — on the grounds that it is regulating commerce. If government can do that under the commerce clause, what can it not do? “The Framers . . . gave Congress the power to regulate commerce, not to compel it,” writes Roberts. Otherwise you “undermine the principle that the Federal Government is a government of limited and enumerated powers.”
They’re worried over at PL, and other pundits wonder why a thing can be not-a-tax on page 15 of Roberts’ opinion and yes-a-tax on page 35. An unexpected set of rulings from the Supreme Court, but in the end, the mandate became a tax, and voters understand the word “tax” very well.
We’ve been stunned at the obviousness of the absence of second-order thinking from the left during this political season. Each of the chosen narratives has backfired to one degree or another; they didn’t think these things through and prepare for the blowback. The WOW, doggiegate, Martin-Zimmerman, Ann-work, gay-bully, Bain-Solyndra, and on and on. Here’s the latest, via Ann Althouse. The anti-Walker folks in Wisconsin are apparently going to publicize who votes and who doesn’t. Aha, voter intimdation! Our second immediate reaction: what an interesting way to create all sorts of problems for those engaging in voter fraud, of whom we expect record numbers in 2012.
California’s budget deficit has swelled to a projected $16 billion — much larger than had been predicted just months ago — and will force severe cuts to schools and public safety
California would have to pay $6 billion to complete a 130-mile segment by September 2017, a plan that requires 120 permits and buying 1,100 parcels of land…It would mean spending as much as $3.5 million every calendar day, holidays and weekends included — the fastest rate of transportation construction known in U.S. history
(BTW, the high-speed rail project was sold based on insane estimates of ridership.) Maybe California can raise the money from that $1000 fine for throwing a frisbee.
