The repository of one hard-boiled egg from the south suburbs of Milwaukee, Wisconsin (and the occassional guest-blogger). The ramblings within may or may not offend, shock and awe you, but they are what I (or my guest-bloggers) think.
Starting tomorrow and for the next week, I’ll be minding the store over at Sister Toldjah along with Brian of Liberty Pundit and Anthony of Public Secrets (which reminds me; I’ve got some roll bloating to do). Most of my stuff will be over there the next week, so I’m calling in the clans to help fill the void.
The bigger void will hit next Friday, when Shoebox hits the road. Hopefully I can remember how to put up more than a post a day :-)
I can add a second word to Shoebox’s one-word description of President Obama and apply it to Wisconsin Governor Jim Doyle. There are so many taxes that have gone up under Doyle’s tenure, but I will focus on just one: the cigarette tax. Doyle wants to jack that up another $0.75 per pack just over a year after he raised it $1.00 per pack, and in the same year that the federal government increased their taxes by $0.616 per pack (or a 58% increase).
First, let’s review what Doyle said as part of his 2003 State of the State address: “Going forward, my mind will be open to every solution — except one. We should not — we must not — and I will not — raise taxes.” (emphasis in the original). Oh really?
The cigarette tax in Wisconsin was $0.77 per pack when Doyle assumed control in 2003. In 2007, he signed into law an increase to $1.77 per pack, which took effect on January 1, 2008, which represents a 130% increase. By comparison, inflation was only 17.01% between 2003 and 2008 according to the Bureau of Labor Statistics.
Back in February, before Doyle released his Necrobudget (© Kevin Binversie), he pushed for the other quarter per pack increase that he sought two years ago. Quoting the Wisconsin State Journal story’s paraphrase of Doyle’s rationale at that time, “Since December, Doyle has been pointing out that two years ago he sought a $1.25 increase in the cigarette tax and had to compromise with Republican lawmakers for the $1 increase that became law — in effect leaving a quarter on the table.”
Allow me to translate for those of you who don’t quite get Doyle’s mindset – “The money’s mine, ALL MINE!”
Of course, it’s not going to go up a quarter; it’s going to go up three quarters. The explanation that it is to get people to quit doesn’t hold water; the Feburary Wisconsin State Journal story also noted that advocates say that a 10% increase in the total price is enough to create a significant cut in smoking. If memory serves (and it must; I don’t smoke), the price of cigarettes was somewhere around $4.50 per pack last month. At last check, $1.37 per pack in new taxes between Uncle Sam Hussein and Uncle Craps was well north of 10%.
No, that is NOT a delayed April Fool’s joke. Clarice Feldman spotted this photograph from AFP’s John Stilwell (working as the pool photographer; The News Organization That Cannot Be Quoted™ didn’t mention which part of the pool Stilwell works for) showing President Barack HUSSEIN Obama bowing to Saudi King Abdullah at the G-20 summit…
Wait; it gets better. Curt points out that Barack HUSSEIN Obama did not bow to British Queen Elizabeth II, much less from the waist, choosing instead to shake her hand. Clarice further points out that Miss Manners frowns upon Americans bowing to any foreign royalty because that act recognizes that monarch’s power over his or her subjects.
Meanwhile, Jim Hoft found video of Barack HUSSEIN Obama displaying fealty to the Custodian of the Two “Holy” Mosques in British Satellite News’ coverage of the G-20 Summit (fast-forward to the 1:37 mark).
[youtube]http://www.youtube.com/watch?v=vgDsXbThvv8[/youtube]
In case you missed the effect of that, Michelle Malkin dug up the full bow courtesy Canal 24h (at the 0:54 mark)…
[youtube]http://www.youtube.com/watch?v=S60U-hl35Gw[/youtube]
I believe Michelle said it best: “I will not submit!”
Revisions/extensions (12:23 pm 4/3/2009) – Just in case you missed the import of the last video, Ed Morrissey highlights it for you, and explodes the liberal meme that Obama was just picking something up off the floor. Unless he was using The Force, there’s no way he did that. Bonus item – it didn’t buy him any love from the House of Saud’s English-language mouthpiece.
I previously mentioned the Tax Day Tea Parties scheduled for Madison (Capitol Steps, King St entrance, 11 am-1 pm) and Appleton (Fox Banquets, 111 E Kimball, 5:30 pm-7 pm). There’s a few more items for Wisconsin, courtesy Brad V, the gang at Tax Day Tea Party, and the Google map put together by FreedomWorks (H/T – Michelle Malkin):
(Do click both maps; there’s too many to be contained in one Google Maps page)
The additions to the above:
– Milwaukee – Federal Building, 517 E Wisconsin Ave, noon
– Superior – David Obey’s office, 14th St and Tower Ave, noon-1 pm
– Fort Atkinson – Municipal Building, 101 N Main St, 4 pm-5:30 pm
Also, the fine folks in Racine will be taking care of those that thanks to work and stress from paying Uncles Sam and Craps, cannot make a mid-week tea time. They’re holding a Tea’d Off Party at Racine’s City Hall (where 6th St, 7th St, and Washington Ave all meet) Saturday, April 18, at noon.
Revisions/extensions (9:22 pm 4/2/2009) – There’s a couple more parties sprouting:
– La Crosse – Post office, 425 State St, noon
– Eau Claire (still a bit tentative; thanks Jo) – City Hall, 203 S Farwell St, noon
Audio of another Obama supporter incapable of living without the aid and assistance of the government. Sorry I can’t embed but you HAVE to listen to this!
During the campaign:
“Not any of your taxes!”
Today:
The cigarette excise tax that tobacco companies must pay the federal government rose Wednesday by 61.6 cents per pack, or $6.16 per carton. The tax now comes to about $10.10 per carton, or $1.01 per pack.
According to Gallup:
Looks like a pretty substantial tax increase, especially for those with the lowest incomes.
I’m beginning to wonder if when the Keynesians talk about the “multiplier effect,” they are referring to the number of times that people will need to spend the $12 per week that they got just to pay for the “No tax increases” that Obama promised.
I only wish The Wall Street Journal were pulling an April Fool’s prank with this story on Congressional bonuses. However, they’re not. The highlowlights:
The story does not mention how much in excess office funds was returned this year, but notes that in a typical year, between $1 million and $2 million gets returned, and that in 2006 (the previous election year), just $36,549 was returned.
I wonder if President Obama has considered nominating a Democrat who hasn’t been caught making “errors” on their tax returns?
President Obama’s nominee for secretary of Health and Human Services, Gov. Kathleen Sebelius, failed to pay $7,918 in taxes and interest, she writes in a letter sent today to Senators Max Baucus and Charles Grassley.
OK, to be fair, it does appear that her issues may have been a bit less straight forward than Geithner’s:
According to Sebelius, an accountant who was hired to review tax returns for 2005, 2006, and 2007 discovered a number of errors. “In July of 2006, my husband and I sold our home for an amount less than the outstanding balance on our mortgage,” Sebelius writes. “We continued paying off the loan, including interest we mistakenly believed continued to be deductible mortgage interest.”
In addition to this error, there were three charitable contributions for which they “could not locate our acknowledgement letter.” She adds she had “insufficient documentation” for some tax deductions for business expenses, though these adjustments did not affect the amount of tax owed because she paid the Alternative Minimum Tax.
In separate news, Sebelius testified today for her potential appointment to HHS Secretary. She claims that she will attack fraud in the medical industry:
“Having a few strike operations may be the most effective way to send the signal that there’s a new sheriff in town, and I intend to take this very, very seriously,” Kansas Gov. Kathleen Sebelius told the Senate Health, Education, Labor and Pensions Committee.
I don’t know about you but, anyone who “could not locate our acknowledgement letter,” for charitable deductions and has to back out business deductions because of “insufficient documentation,” sounds pretty close to having committed fraud. Perhaps we voters should consider
“Having a few strike operations may be the most effective way to send the signal that there’s a new sheriff in town, and we intend to take this very, very seriously!”
I’ve written several times about the idiocy of not modifying or eliminating the current interpretation of an accounting procedure known as Mark to Market.
In short, “mark to market” means that financial institutions need to recognize the market value of their investments as they change rather than waiting until they dispose of the asset and recognizing a gain or loss. The purpose for “mark to market” is to reflect the estimated “value” change of the asset, real time, rather than having shareholders or mutual fund holders get surprised (up or down) in one fell swoop.
In a “normal” world, mark to market is a good tool. However, for mark to market to work properly there needs to be a fairly active market for the asset being marked. If the market for the asset has few trades (thinly traded), it has the possibility of causing “fire sale” pricing for assets that have actual, recoverable value that is much higher. This latter situation is what is happening to various financial instruments that many of the banks and other financial institutions (Citicorp) hold. Today, there are many reports that assets like the mortgage backed securities have been written down to as low as 30% of their face value. This while the actual cash flow performance of those same assets are performing at a level that is close to 90% of face value.
Various government entities, including the FDIC, require that banks have capital of a certain ratio to the loans they have outstanding. Part of the capital that a bank has is the value of assets that they invest in. When the assets, like CDOs get written down in a dramatic fashion, the bank or financial institution’s capital is also reduced. This is part of the reason that financial institutions have been chasing after capital infusions during this meltdown. Part of the reason that the TARP plan exists is to infuse capital into financial institutions to replace the eroded capital from written down assets. You can see from the previous paragraph that because of mark to market, it is possible that TARP is having to infuse 50% + more capital than they need to for the capital they are providing to support the CDOs.
Finally, FINALLY, after having first written about this nearly a year ago, it looks like the FASB is going to address and likely modify mark to market. About dang time!
You may ask, “Shoebox, if this was so obvious, why did it take a whole year to address?” Good question! This is yet another example where government’s “good intentions” led to unintended consequences.
Mark to market as we know it, was created by the Financial Accounting Standards Board (FASB) with FASB 157. FASB 157 was a direct result of the Enron scandal. Congress was so incensed by what happened at Enron that they basically told FASB and others that either they fixed the problem or Congress would. FASB 157 is the result.
The other result of Enron was that auditing firms became extremely conservative in interpreting FASB rules. All you have to know is that Arthur Andersen, then one of the largest auditing firms in the world, ceased to exist as a result of Enron and you can see why auditing firms quit “interpreting” and merely “implemented” anything that FASB promulgates.
Let me make one caveat to my advocacy for a change in mark to market. Many of complained that by eliminating M to M we will not have financial statements that fairly reflect the company’s status. In some respects that’s accurate. What I propose is going back to a mark to model for financial purposes but providing information in the financial statement notes that reflect the difference between mark to market and mark to model. This will give both sides of the argument the information they want/need and will allow knowledgable investors the information they need to make assessments.
The sad part of all of this is that FASB, the FDIC or Congress could have acted on this long ago. Had they done so, even if only doing so on the capital requirement calculations, some portion of the hullabaloo in the financial industry could have been avoided. Additionally, some of the financial bailouts could have been avoided or at least mitigated and maybe, just maybe, President Obama would not have had the door thrown wide open to waltz into any company he now chooses and dictate how they should do business.
I hope that FASB does act on Thursday. If they don’t, expect a nasty reaction from the stock market. If they do act, as I expect them to, this could provide a significant boost to the viability of several financial institutions. If that happens, we could see the end of the beginning of this financial downturn.
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