Super Policies for the Lobbyists. Shame About the People

It is rare that words fail me. Fortunately, this quote from today's LAT did not leave me speechless, but it was a close call. "Michele Bachmann said that if she is elected president she would spur the economy and create new jobs by reducing corporate taxes, repealing new Wall Street regulations and cutting federal spending for healthcare and retirees."

As an elected Representative it is clear that Ms. Bachmann believes in government of the people, by the people, for the people... But only those who contribute to her election campaign and anonymous, but supportive, PAC's. I'm sure that Lincoln is turning in his grave. Pity the vast majority of 'the people' of Gettysburg, and everywhere else in the US, were Ms. Bachmann's policies to become reality.

Deregulate banks, remove the (minimal as it is), unemployment safety net, repeal healthcare legislation, cut taxes for the corporations. Interesting. I do have a couple of questions, however. Quite who will be healthy enough (physically and financially) to be in a position to purchase the products and services from the manufacturers and banks that Ms. Bachmann supports? From a small business perspective, where I do believe that taxation is too high, quite how will any element of this policy help provide educated, qualified, and incentivized employees; then maintain their health? Ms. Bachmann?

There were a couple of points made during the 'meet the press' session with which I completely agree. Dumping the existing tax code for something that is fair and balanced (sorry Fox, not your version), is way overdue. Also, allowing 100% expensing of capital investments is a great idea. However, here there is a significant caution that must be considered.

Thirty years ago I founded a successful technology finance company. The 'ah ha' moment at the inception of the business was that the (then current) 100% capital allowances would have to be dropped from the UK tax code. There was just too much abuse. Instead of the allowances benefiting businesses that invested in development and capital plant, they were being sucked up by financial institutions to increase these institutions' returns on lease transactions. As it turned out, my prediction was correct and the business was perfectly positioned when 100% allowances were dropped from the tax code, allowing the business to have a successful IPO just four years from incorporation. As with the UK situation then, for the US to bring in unlimited 100% allowances now would benefit primarily the banks, and corporations with high cash balances. This will not help the people, nor the Nation's biggest employer... Small business.

Yes, the US tax code is too complex. Personally I'm in favor of a move to a consumption (VAT/IVA) tax and a reduction in income and corporate taxes. Preferably, this would be a flat rate with equitable thresholds that support a basically humane standard of living for those on 150% of minimum wage and below. However this is unlikely, either during this administration or the next. What can be done, and quickly, is to vastly increase the Section 179 allowances. Somewhere around $500,000 would seem to be a reasonable number. I would add a couple of essential provisos here. Firstly, make the tax benefit non-transferable. This will remove the 'leasing' abuse. Secondly, clarify the technology R&D definition to ensure that employee time invested in development gets a 'double dip' and ranks equally with capital equipment purchases. Finally, limit the allowances to companies with fewer than 500 employees; this is significantly over 90% of American businesses.

Ms. Bachmann's solutions only have a single group of beneficiaries. Primary in this group are the very financial institutions whose sins of omission and commission played a major role in the financial mess the consequences of which we are attempting to unravel now. 'No taxation without representation' is a fine goal, as is 'government of the people by the people'. However we're not going to get there all the while that the People are hoodwinked by the Representatives whose campaigns are not funded by thinking People.

Time for Deficit Spending

Interesting headline in the WSJ just now... "Wall Street Veterans Struggle To Comprehend Recent Market Moves". Perhaps they should ask David Kelly, (presumably not a veteran(?)), the Chief Market Strategist at JPMorgan Funds. Mr. Kelly is quoted in the NYT as saying, “The biggest risk we face here is recession.” I have a rather disturbing piece of news for Mr. Kelly.

We don't face the risk of recession, the majority of European and US families have been experiencing this phenomenon for over three years now. This is not a 'double dip'. As I've mentioned before it has been one continuing slide. This is clear to see when the 'seasonal factors' and other politically expedient elements are removed from the massaged statistics.

Sadly we're in the eye of a perfect storm. This is evidenced by the riots in the UK, and the US-centered, but otherwise global, market turmoil. The cause is identical both sides of the 'Pond'. As a fiscal conservative with more than a passing acquaintance with macro economics I'm all for fiscal responsibility. However, in my book, such responsibility is the province of governments and the judiciary. Rooting out 'pork barrel' spending driven by recompense for campaign contributions should be the priority; not cutting essential programs and pulling the safety net (such as there is in the US), when it is essential to maintain the bare minimum of equality. As a social liberal, I am embarrassed by the abuse of the benefit system; a phenomenon particularly prevalent to the East of the Atlantic. However, the relative cost of the corruption to the left pales into insignificance against that to the right.

I have news for the new 'Tea Party' Representatives too. You can't have it both ways. The truth will come out eventually. Those who succumbed to the Big Lie and voted you into power will see through the rhetoric and hypocrisy before the next election. This is in the US. In the UK the situation is somewhat different. The population are demonstrating that David Cameron's policies have failed. As a lifelong Liberal I am left speechless by Nick Clegg's betrayal given that his fate will, sadly, mirror that of the Tea Party members in the US; taking the whole Liberal Party down as a result. What a waste.

Now, the sad truth. Having lived through the ravages of inflation in late 50's, 60's and 70's I understand the costs and the consequences. Further, I am aware of the causes. However, today we have better control, and quicker reactions, as a result of technology and global co-operation. As Japan demonstrated over a nine year period, deflation has potential risks equal to, or greater than, those of inflation, however the rules have changed in the past twenty years. We are on the brink. If there was ever a time when we should focus on the immediate need it is now.

No, deficit spending is not pleasant; certainly its consequences. However the US and Europe are where they are. Deficit spending is the only path that is available to halt the slide, get people back to work and, strangely enough, to protect the investments and other assets of the corporations and wealthy.

Oh yes, one final thought. The last phrase of the paragraph above is only possible if corporate tax loopholes and benefit fraud are rooted out of the system. This, of course, is the rub.

In Context - Out of Place

It is truly sad to see the surprised reactions of apparently bright pundits and economists to the sell off in the majority of today's media. As I've been saying for a while, this isn't going to be a double dip. It's been one long decline. Something that, I'm convinced, history will show when the 'seasonal', 'energy', 'foodstuff' and other Maslow-required factors are 'factored' out.

On the lighter side, I could not resist taking a screenshot of a Guardian's page a few moments ago. The juxtaposition of the headline and the ad unit in the right rail was just too perfect. This does show the risks of dynamic placement based on a simple taxonomy without taking into account context and sentiment. Of course, if the tense in the ad's headline were to be changed the click through could be remarkable... Maybe it was/will be.

As a very close friend has said to me for years, "I love Mac's, I just don't like Apple." Thanks Regan! Twenty hours of using Lion highlights the veracity of the statement.

Thirty minutes to download, fifteen minutes to install (seamless and painless BTW), now, tens or hundreds of hours to re-gain the productivity through adjusting workflows because Apple have decided what the average person wants and adjusted the OS to pander to the lowest common denominator. Typically, given the past five year's history, Apple continue to ignore the power users who kept the company in business during the lean years.

The major problem, in this particular case, is Apple's secrecy gene. The 'Natural Scrolling' debate is a case in point. I would be willing to bet that Apple has 'touch' displays on the stocks for laptops and LED displays. When these are out, the reversal of the scroll direction becomes essential for logical use.

Here is a case where a pre-announcement would actually make sense. As pads and smartphones become ubiquitous and, for many, their first introduction to 'computing', using a finger to navigate will be second nature. Mice will go the way of the buggy whip. With Lion and the TrackPad Apple has a significant lead. Announcing that touch screens are coming soon and advancing the launch would certainly confuse the enemy and endear the converted. Just a thought.

PS: I particularly liked the comments from both sides, on the following article - http://www.businessinsider.com/mac-os-x-lion-natural-scrolling-2011-7#comment-4e2847ac49e2ae56720e0000

The 'Fifth' Element

As far as publishers, copyright, and social media go, next year’s US Supreme Court docket should prove extremely interesting. Those who follow my position on First Amendment rights and US extra-territorial ambitions will know that I see some fascinating cases on the horizon; both here in the US and internationally.

By way of background, last month I wrote on the need for Internet users to be concerned about the ‘Big Media’ backed Bill (S.978) that aims to criminalize even inadvertent sharing of copyright material. This was followed up with two further posts. The first was a brief note on actions by the DOJ and ICE designed to take effective control of top-level domains, irrespective of the owner’s domicile. The second focused on the First Amendment issues surrounding international precedent.

However, cases moving through the system now demonstrate the time-critical need for a serious look at the impact of technology and digital media on the original objectives of the Fourth and Fifth Amendments too.

The most recent example is a Colorado case (US v. Fricosu), that hinges on the right of the prosecution to access data on Ms. Fricosu’s computer. However, given that the data are encrypted, such access would require the defendant to unlock the files. The defense claims that providing the password would be tantamount to self-incrimination. A view that is supported in an amicus brief filed by the Electronic Frontier Foundation.

Although the focus in the Fricosu case is on the 5^th, in many ways it is the interpretation of the 4^th that is the most challenging, given that the test of ‘reasonableness’ has often been at the core of cases with their genesis in the physical world. Of particular relevance in the digital realm is a Supreme Court ruling in a 1967 case (Katz v. United States). In this case the Court extended the 4th Amendment to cover situations where a person has a "reasonable expectation of privacy”.  My question here, therefore, is: what expectation of privacy can the majority of active social media users expect?

Last month’s FTC ruling that Facebook data should remain accessible to potential employers and others for seven years, combined with the lax and ill-thought-out posting habits of the majority, must surely be taken into account when considering one’s expectations of privacy. Does this imply that those who are not socially active in the digital world, and/or control their friends, followers, and circles sensibly, should expect a higher level of 4^th Amendment protection? As case law and statute stands currently, I think not.

Naturally, for the majority of readers of this post, the question will seem moot. After all, it is only the criminal element that needs to worry about such things. Unfortunately this is not so clear-cut.

Assuming that the Fourth Estate-financed ‘Commercial Felony Streaming Act’ (S.978), becomes law many, otherwise honest, Internet users could find themselves needing all the protections that they can muster to avoid a felony rap.

Maybe now is the moment to 'Amend' the power of the 4^th 'Estate' rather than let the lobbyists drive the overdue change of the 4th 'Amendment'. This is certainly an option that should be in the hands of 'The People'. Sadly, few recognize the fact and the import. Supporting the aims of FixCongressFirst.org is a good first step.