L u k e n . O r g

So reading between the lines, here’s the skinny. Verizon and Google are willing to concede to FCC regulatory control of fixed line broadband and not jack up content providers over bandwidth. Why, because maybe fixed line isn’t as profitable. But where they want hands off is with wireless, where there is plenty of growth and lots of margin. Fixed line is capital intensive and mainly labor intensive, especially with union workers sitting in trucks for forty minutes between each work order. Did I just say that and drift into another topic?

According to the proposal, Internet service providers would not be able to block producers of online content or offer them a paid “fast lane.” It says the Federal Communications Commission should have the authority to stop or fine any rule-breakers.The proposal, however, carves out exceptions for Internet access over cellphone networks, and for potential new services that broadband providers could offer. In a joint blog post, the companies said these could include things like health care monitoring, “advanced educational services, or new entertainment and gaming options.”

via Google and Verizon Offer a Vision for Managing Internet Traffic – NYTimes.com.

You simply cannot make this stuff up. So congress votes o a healthcare bill, without actually reading the bill. Only to find out that it may adversely affect them and their staff. So if the plan negatively affects them directly because they didn’t read it and don’t know what’s in it, how does it affect me and my family?

This is what happens when you take a kneejerk reaction to a big and critical issue.

In a new report, the Congressional Research Service says the law may have significant unintended consequences for the “personal health insurance coverage” of senators, representatives and their staff members.For example, it says, the law may “remove members of Congress and Congressional staff” from their current coverage, in the Federal Employees Health Benefits Program, before any alternatives are available.The confusion raises the inevitable question: If they did not know exactly what they were doing to themselves, did lawmakers who wrote and passed the bill fully grasp the details of how it would influence the lives of other Americans?

via Washington Memo – Baffled by Health Plan? So Are Some Lawmakers – NYTimes.com.

Today, I officially declare my candidacy for congress. Nothing personal but first off, I can care less about you people, I’m not going there to represent you. I’m going for the perks. All I need is to get elected and get sworn in. I promise that right after that, I’ll bring some pork project to Wake County, then resign.  It’s a win-win for us all. You eventually get who you want after I leave, and I get all the perks.

First off, the health plan, why not run for Congress. Take a look at this. This is totally worth lying and kissing babies for.

Personal doctors on call 24/7. Coverage that knows no caps. No exemptions for pre-existing conditions.Those are the sorts of benefits members of Congress currently enjoy on the taxpayer’s dime, and the kinds of benefits Americans on a government-run public health care plan will never see if Obamacare passes.“One thing is certain: Congress will exempt itself from whatever lousy health care system it forces on we little people,” said Michael Cannon, director of health policy studies at the Cato Institute. “Congress will get better insurance than you do because politicians always get a better deal under government-run health care.”While it’s not news that Congressional health insurance plans are posh, CBS News recently uncovered the details of plans – right as the details of the Baucus health care bill are being hashed out.Members of Congress can choose from five different plans, and have access to both the VIP Bethesda Naval Hospital and a reserved spot Ward 72 at Walter Reed Army Medical Center, an elite division usually reserved for military members. Their everyday medical concerns can be taken care of at a doctors office located inside of Congress.Their premiums are the same as those of insurance plans with half the benefits, and the plans last a lifetime; not until Medicare kicks in do ex-Members or loose their Congressional health benefits. Congress has repeatedly voted down any provision that would switch their insurance plans to the lower-grade public option if Obamacare goes through.

That’s just great, regardless what I subject my constituents to whom I’m supposed to represent, I get a premium plan loaded with perks. I also hear that the lifetime pension is a great deal too. So just serve a single two-year term and collect money the rest of my life.

And in related humorous news, check out how it’s going in Britian with their health system. It’s soon to collapse under it’s own weight.

THE National Health Service has spent £1.5m paying for hundreds of its staff to have private health treatment so they can leapfrog their own waiting lists. More than 3,000 staff, including doctors and nurses, have gone private at the taxpayers’ expense in the past three years because the queues at the clinics and hospitals where they work are too long.

via Gateway Pundit.

So some history, a few years ago, NC bent over backwards in attracting Dell to come to NC. All kinds of tax breaks and incentives were given to them. So now, the recession hit, they are closing the plant, 900 workers are gone and NC is out literally millions of dollars that they gave Dell. I’ve never liked the idea of a states bidding for business with lucrative incentives like tax breaks. They never work in the states or public good’s favor. Frankly, I think it should be illegal for states to gamble away tax payers money like that. A company should locate a facility based on the merits of the state, the available talent pool, utility costs, land costs, etc. Not by how much money a state can stuff in their pocket. It’s been an ongoing trend here in NC and I just think it’s worth the cost in the long term.

Dell Inc. DELL will close a North Carolina plant, putting some 905 employees out of work, as the personal-computer maker continues its restructuring.The company is in the midst of cutting $4 billion in costs the next two years as Dell deals with slumping profits and still-weak demand, especially among its key corporate customers.

via UPDATE: Dell To Close N.C. Plant, Affecting 905 Workers – WSJ.com.

Cash for Clunkers are driving people into the showroom. the new problem is that there may not be enough cars since Detroit has scaled back. This got me thinking about how to create a permanent incentive for car purchases. How about no sales tax on purchasing a qualified efficient vehicle and no property tax on that same vehicle for the first four years? Wow, what an incentive, but that would be to practical. Providing real solutions to job creation would be out of the question.

Which leads to the never-ending debate. Either a national consumption tax or a flat income tax, one or the other. How about an experiment, alternate between the two on an annual basis for the net few years then compare it to the current system to see how it fares. I don’t think politicians would like that because it would obviously be successful and they would loose their biggest power tool, the tax code.

Car dealerships all over the country are bracing for a spike in sales thanks to the “Cash for Clunkers” program. However, some car dealers said they fear the program could end up being a victim of its own success.

The Federal Government is offering a credit of up $4,500 off the purchase of a fuel efficient and environmentally sound car or truck in exchange for old cars.

via Cash for Clunkers Driving Cars off Dealerships Lots – NewsOn6.com – Tulsa, OK – News, Weather, Video and Sports – KOTV.com | .

I was watching the evening news last night and they were doing a fact check on Obama’s claim that he created 150,000 jobs. Christina Romer who chairs the Council of Eeconomic Advisors and is Obama’s top economic advisor said the following:  “When we have the tax cuts that we’ve had and the spending that we’ve had, historically it has shown that jobs has been created”. And that the number is a statistical figure so it can be presented as fact. So the point is that the numbers aren’t factual, but statistical, so can be presented as fact. I pondered over that but then something hit me.

Whoa, did she just say that tax cuts creates jobs? Well….. we won’t see her on camera anymore. The notion that tax cuts spurs the economy is the antithesis to the idea that government must do all to create jobs. At best, the government can create temporary jobs, mainly on infrastructure and those jobs are not sustainable. Tax cuts essentially make people who have all that excess cash, invest in things to make more money which creates jobs, which is sustainable. If government creates jobs by increasing the size of the government, then mathematically, there will eventually be less private sector jobs to support the government payroll. Take a look at the state of New Jersey. Private job payrolls are falling while government job payroll is increasing. The result? Increased taxes to support government and an exodus from the state. But back to my original point. The chief economic advisor states that tax cuts creates jobs. Following that rationale, the more taxes are cut, the more jobs are created? Is that possible?

Direct video link here…

A friendly piece of advice for a certain tech company being courted right now. In recent history, a telecom company turned down a $28 billion all cash offer and instead, had a twinkle in their eye and opted to take another offer that was $57 billion in …. stock. The result? A massive hangover.

To put it simply, cash is king, cash rules. Taking a stock offering over cash is not exactly a wise choice as the stock has no value until it’s sold, and there is no guarantee that the stock value will go to where you want it. Taking a cash offer gives the flexibility to then channel and invest where and how you want, and not be tied to a single stock waiting to rise. Trust me on this one.

WASHINGTON (AP) – Health and Human Services nominee Kathleen Sebelius recently corrected three years of tax returns and paid more than $7,000 in back taxes after finding “unintentional errors”—the latest tax troubles for an Obama administration nominee. The Kansas governor explained the changes to senators in a letter dated Tuesday that the administration released. She said they involved charitable contributions, the sale of a home and business expenses.

Taxes are a necessity for the services that are provided, and its a good thing. I think most people’s reservations stem from the fraud and waste that they see, from still subsidizing helium production for dirigibles (that’s right) to trying to fund a multi-million dollar “bridge to nowhere”. People need to feel and see that their dollars are used wisely and for good purpose, and value. Next, the tax itself, 10, 15, 20%, and it should be adjustable twice a year, at the discretion of the Treasury, the CBO and GAO, with a plus and minus maximums of a percent or two. Just like the Fed with the short term lending rate to regulate the economy, this measure would help regulate the federal income.

With todays structure, you have people sheltering their money in tax havens and other trickery like for example, the Kennedys. They’re a clear example. Ted Kennedy was once quoted saying ”The estate tax is the most progressive of all federal taxes. It would be terribly unfair to tax work while giving inherited wealth a free ride” but in one year, the family only paid $137K on a $300 Million estate due to creative trust funds that were set up. Do as I say, not as I do. Pay what I say, not what I pay. But it’s more than that, there seems to be a culture amongst those that craft these tax laws. They seem to be above them. Lets level the playing field. Today, the top 5% of income earners bear almost 50% of the nation’s tax burden. And to say that because they are rich, they can afford to and should is not the correct answer. Remember that the 5% has an adjusted gross income of ~150K. So we’re not talking about just the Bill Gates here, but also the everyday person who from whatever means, be it luck, silver spoon, or just hard work, have entered into that space. Tax by class is not the answer it’s what creates malcontent and what drives people to pull these tax stunts, even by those who write the code. Tax equality and fairness is the correct answer. Note that if our President’s recommendations go through, almost 50% of eligible tax payers will not any tax burden at all. So who will shoulder all this? You can only tax the rich so much until hey kick in their influence and withhold political contributions. It will fall on the ever tightening middle class which doesn’t have the financial resources to reach their congressional representatives.

So in summation, flat tax, based on a percentage, allowing for a means test to reduce the burden on lower income earners and those at or below the poverty level.

via Sebelius admits errors, pays $7,000 in back taxes.

As the economy continues to contract, and job losses continue to increase at an alarming rate, Obama is being pressured to take more action. Now that we have a 2 trillion deficit, folks are calling for more stimulus next year. Well, if there was a stimulus plan in 2009 instead of a spending bill, we would have seen a real impact already.

“You may need more fiscal stimulus in 2010,” Jan Hatzius, chief U.S. economist for Goldman Sachs Group Inc., said in a Bloomberg Television interview. The impact of the package already passed will start fading by early next year, he said.

Obama said yesterday that the “astounding” job losses show “bold action and big ideas” are needed to revive the economy. “We have a responsibility to act, and that’s what I intend to do,” he told a group of Ohio police recruits aided by his stimulus package.

Another example why investing in smaller, nimble companies is better than pouring billions of dollars into that sinkhole that is GM, the company that can’t seem to move forward.

A 187-MPH Hybrid As Fast As It Is Green

Italdesign Giugiaro is a familiar name to gearheads the world over, and its designs for everything from Hyundai to Ferrari are well known. Frazer-Nash, on the other hand, is generally considered the answer to a trivia question, but it was once a respected sports car company.

All of those names came together at the Geneva Motor Show to bring us the Namir concept, which combines Prius-beating fuel economy with Ferrari-like speed to produce what the companies say is the quickest, greenest hybrid on the planet.

Namir is Arabian for tiger, by the way. Given the specs on this ride, that name sure fits.

That’s right, this angular, scissor-doored sports car concept is a hybrid. The drivetrain was designed by Frazer-Nash, which Archie Frazer-Nash founded in England in 1923. Once a sports car maker, the company is now in the business of designing, building and marketing hybrid systems. The Namir combines an 814 cc endothermic rotary engine with four electric motors in a system that those involved in project claim delivers 91 mpg and CO2 emissions of 60 g/km. The Toyota Prius emits 104 g/km. Those are impressive numbers, but the number that really wows us is the claimed top speed of 187 mph and a zero-to-60 time of 3.5 seconds.

In theory, anyway, given that it’s a concept.

But the Namir is more than a design exercise. It’s a fully developed prototype. Giugiaro’s engineering division handled the chassis, body, and mechanical layout while the Italdesign Giugiaro Style Center penned the exterior and interior. Frazer-Nash oversaw the electrical and electronic elements, and the whole thing was built by Italdesign Giugiaro plant.

Who knows if this will ever see production. But Italdesign Giugiaro and Frazer-Nash are outside design and consulting firms, so they will work for companies like General Motors, Chrysler or anyone else in desperate need of a high-performance fuel efficient car to boost their sex appeal and CAFE numbers.

Just sayin’…

Main photo by our friends at autoblog.nl, which once again comes through when the automakers at the Geneva Motor Show don’t. Check out more pics of the Namir in autoblog.nl’s gallery. All other images by Italdesign Giugiaro.

via A 187-MPH Hybrid As Fast As It Is Green | Autopia from Wired.com.

President Obama said Tuesday that now is a good time for investors to buy stocks if they focus on the big picture.

Mr. President, if you want to encourage investors to purchase stocks, get rid of capital gains. In fact, remove the financial tax barriers to investing. I’m not sure how you can encourage investors to take their money and buy stocks to prop up companies in an environment where success is penalized. You’re about to raise taxes on the 5% of people who already pay 45% of the taxes, and who are the ones who can directly invest and drive the economy. Whether you like it or not, its people with money who are the ones that can spend it.

I myself am not spending, and we here have a good capital reserve. We’re not spending because of uncertainty. Uncertainty in the sense that I expect things to get worse, or drag on for a long time because of the stimulus spending bill. The recently landmark spending bill really has nothing to do with jump-starting the economy, but is a collection if ideas that has finally found an excuse and opportunity to be implemented. What we wanted in a stimulus package was something that would actually stimulate the economy today. A good litmus test for the package would have been: anything that does not directly provide a positive impact in improving the economy (jobs, spending, etc.) within five months cannot be in the stimulus bill. Those would have to go through the normal debate process for a spending bill.

via Obama: It’s a Good Time to Buy Stocks – First 100 Days of Presidency – Politics FOXNews.com .

Now this is interesting. On paper, half of the $700 billion financial rescue package has been spent, but it seems the Treasury Department has committed nearly $10 billion in additional TARP money before it’s been released by Congress. So are we not learning anything from this? When parts of the government is used to spending money it doesn’t have, what message is that? I truly hope the additional $350B is heavily scrutinized with loads of requirements and caveats to whoever receives it. I was reading another article where officials are stating that there is no way of accounting for what has already been spent. Just last week, American Express received over $3B as they are now a “bank”. But they have not disclosed what they have or will do with the money. My thoughts? Executive retention bonuses for those execs that are critical to the success of the company. The same ones who got us into this mess. Basically, Paulson over at the treasury is there simply to help out his buddies, nothing more…..

So here’s some ideas on how to spend the money. First, let the big 3 fail and restructure, and get rid of those unions.

Ron Paul nails it with his assessment that with this bailout, we are just prolonging the inevitable recession. The choice is really a short recession or a long recession. If we liquidize the bad debt, let the market set the value of distressed properties, just like when Lehman Brothers went under. When the price gets low enough, it will be eventually bought. By providing this bailout, we’re prolonging the inevitable by propping up home prices and financing continuous building when there is too much inventory in the first place. And in all honesty, the value of these assets aren’t low enough, when they are, they will be bought on the open market.

Hopefully, congress will have the strength that if they do a bailout, they will pay as little as possible for these assets. And with Goldman converting to a bank, they will have access to capital through the discount window, and they will lend money just like any other bank. 

YouTube – Ron Paul on Fox Business News 9/24/08.

The Securities and Exchange Commission on Friday issued a temporary ban on short sales of 799 financial stocks, a move against traders who have sought to profit from the financial crisis by betting against bank shares. The temporary ban, intended to bring calm to the markets, follows similar action by Britain on Thursday. The S.E.C. said the “temporary emergency action” would “protect the integrity and quality of the securities market and strengthen investor confidence.”

So I ask, when the market returns to “normal”, will short selling be OK again? Exactly when is it OK to bet and assist in the demise of a company and undermine capitalism and the economy? And why would the S.E.C then lift the ban, returning to ignoring the integrity and quality of the securities markets and reduce investor confidence? Notice that in some European countries like Germany, short selling of any kind is banned. 

“The commission is committed to using every weapon in its arsenal to combat market manipulation that threatens investors and capital markets,” the S.E.C.’s chairman, Christopher Cox, said in a statement announcing the measures on the commission’s Web site. “The emergency order temporarily banning short selling of financial stocks will restore equilibrium to markets.”

What, and then it’s back to chaos as speculators are allowed to run wild? And especially naked short selling, which is the practice of selling a stock short without first borrowing the shares or ensuring that the shares can be borrowed as is done in a conventional short sale. When the seller does not then obtain the shares within the required time frame, the result is known as a “fail to deliver.” Why exactly is that legal in the first place? That’s like buying something on credit, and not even having the credit. Or selling an item that you don’t even have. 

It has often been blamed for forcing prices down in times of market stress, but the level of anger has intensified as the American government has been forced to bail out major financial institutions and the leaders of some investment banks have asked for action to protect their shares.

Now some of these investment banks are asking the government to help protect their share value. Aren’t these the same investment banks that borrowed money on heavy margins, 30x their assets, to put in risky mortgage investment that they knew were a stack of cards? Knowing that mortgages were being sold to people who didn’t even have to verify their income???

Short sellers say that the criticism directed at them, and any restrictions on their activity, are wrong-headed, because they were among the first to raise the alarm about the risky mortgage lending practices that led to the current financial crisis.

This may be true, they were among the first to raise the alarm, and profited in the demise in the process. But the alarm could have equally been raised by pulling existing capital out of these vehicles also.

Senator John McCain, the Republican presidential candidate, said the S.E.C. had “kept in place trading rules that let speculators and hedge funds turn our markets into a casino” and said that the S.E.C.’s chairman, Christopher Cox, had “betrayed the public’s trust.”

And then that crazy old man you see screaming “Hey kids, get off my lawn” chimes in with his “it’s the other guy’s fault” comment. I’m not sure what Christopher Cox could have done, if anything. And why do I say that? I say that because back in 1999-2000, Congress (who that crazy old guy belonged to) passed legislation specifically banning the regulation of Credit Default Swaps and Collateral Debt Obligations by the S.E.C. Check it out. Basically, congress did the bidding of the banking and investment community to let them run rampant on CDS’s and CDO’s with no checks and balances. Basically, these vehicles are insurance policies that are unregulated. They were not required to keep any capital reserves at all, and that’s what happened to AIG. But hey, I’ll be posting more on this particular subject and how this all happened in layman’s terms in an upcoming post.