McB Breaks Down Whatever Dumbass Thing Was Said : Minimum Wage Edition

This morning on Bloomberg, former NYC Mayor Mike Bloomberg appeared with everyone’s favorite bank CEO, Lloyd Blankfein, to discuss the economy and Goldman’s small business lending program which is apparently a thing, not just some bullshit in a commercial. It was a pretty shitty piece but at one point Mike (and I can call him Mike because we’re totally friends like that) starts in on how he’s not a fan of raising the minimum wage and would instead like to raise the Earned Income Tax Credit to help the same people.

Now, there are some big problems with this… it does nothing to address inequality, lack of wage growth, and it explodes the deficit. Effectively, it’s a way of funneling money directly from the federal government to Wal Mart.

Raising the minimum wage consistently grows the economy, it doesn’t contract it or contract employment. It’s time to put the myths aside and get on with restoring wage growth.

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Pissing into the wind…

Governor Abbott Signs State Budget Into Law

AUSTIN – Governor Greg Abbott today signed HB 1, the General Appropriations Act, into law. Upon signing the 2016-2017 budget, Governor Abbott released the following statement:

“I am proud to sign a Texas budget that cuts taxes, provides a record amount of funding to secure the border, improves our schools and builds more roads. This budget proves that government can control its spending while ensuring the essential needs of its citizens are met.”

In order to further reduce our state’s debt burden and restrain growth in government, Governor Abbott has vetoed nearly $233 million in discretionary spending and made over $295 million in overall reductions.

The subject well covers my thoughts on this statement and the budget.

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Texas decides to waste money on bullion depository

I’m very impressed that Governor Abbott has signed the bill to create a bullion depository in the state of Texas. With Eye on Fiscal Armageddon, Texas Set to ‘Repatriate’ Its Gold To New Texas Fort Knox details the whole plan and it’s concomitant flaws. What they don’t cover is probably he single biggest issue, the TRUE cost to Texas taxpayers…

In a telephone interview with TPM, Capriglione said during the “interim period” between legislative sessions before his second term began, he set about re-designing the depository bill to outsource many of those more expensive functions to the private sector. Although the depository is performing the same functions in the new law as it had in the older version of Capriglione’s bill, shifting the execution to private contractors yielded a so-called “fiscal note” in the legislature that calculated an “indeterminate fiscal impact to the state.” Because it’s outsourced rather than run by state employees, it is no longer counted as a concrete expense in the state budget.

Now, this is just complete bullshit since those contractors are only doing this because they want to get paid and none of those people are going to spend money without something from the state, like a guarantee and insurance to cover associated risk (and no, Rep. Capriglione, I’m not talking about just the risk that some folks might come and steal the gold which is possible, but I’m also referring to the counterparty risk inherent in a scheme like this which effectively sets up an exchange AND allows dealers to set up mutual funds with almost no disclosure). A private insurer will charge a pretty penny to cover this so I’m sure it will be the state who steps in, with a significantly discounted rate that doesn’t begin to cover the cost of the actual risk.

Now, with physical gold outside of the range of a regular exchange, all this Texas gold will trade at a decent discount to spot gold because it has to be transported. Which means ALL gold traded in this hybrid exchange depository will trade at a discount to NYMEX because it has to be delivered there ultimately since it’s the most liquid market in the US. So, for all you broker dealers looking to set up with this thing, you’re cutting your margins likely below profitability right out of the gate.

Then there’s the issue of using drafts on the bank as a sort of gold backed transactional currency but it doesn’t explain WHY this would matter… except as an inflation hedge which is fine as long as you ignore the fact that the price of gold has actually deflated. Substantially.

Finally, this is all a complete waste of time since the State of Texas HAS NO GOLD. UTIMCO has some gold, which will flip to a loss if it’s ‘repatriated’ to Texas.

I have to wonder, given Rep. Capriglione’s profession, if he has personal plans to profit from this, solely or in partnership with some of his donors.

 

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OMG, would you shut up Leon Cooperman?

Leon Cooperman may be a brilliant investor, but his hearing needs some work. So does his anger management.

“I don’t need anybody crapping all over what I do for a living,” Leon Cooperman, the billionaire founder of the Omega Advisors hedge fund, told CNN on Monday, adding that she “hangs out with all these people in Martha’s Vineyard and in the Hamptons and then the very first thing she has to say is to criticize hedge funds.”

Cooperman says he and other maligned hedge fund managers have given millions of dollars back to society in the form of donations to universities, charitable organizations, and cultural institutions.

“I have nothing to apologize for. I’ve made a lot of money. I’m giving it all back to society,” he said.

This defensive diatribe (and Leon, we’ll be HAPPY to debate the social and economic utility of hedge funds whenever you’d like) was the result of a theme coming from Clinton in which she does not criticize hedge fund managers but she does talk about tax code fairness…

“There’s something wrong when hedge fund managers pay lower tax rates than nurses or the truckers that I saw on I-80 as I was driving here over the last two days,” Clinton declared in mid-April as she campaigned in Iowa.

“People aren’t getting a fair shake. Something is wrong when CEOs earn more than 300 times than what the typical American worker earns and when hedge fund managers pay a lower tax rate than truck drivers or nurses,” she repeated a month later when she returned to the state.

Note that there’s no critique of hedge funds, just a comment about tax fairness. Clearly, Leon has a reading and listening comprehension problem.

Of course, the WaPo and Politifact both rated Clinton’s statement as false in absolute dollar terms and false in terms of rates, which is obviously what she meant (see the second quote). They are both wrong since their analysis doesn’t take into account total tax burden vs. income, which for the average American is about 30% and for the average billionaire (like our friend Leon) is around 22% or less.

I think we can all agree that putting progressivity back into the tax code is a must as Secretary Clinton has been pointing out. I think it’s a shame that Cooperman, who first gained the attention of the general public by whining about how President Obama is ‘antagonistic to the wealthy’, is still whining about this shit.

And, for the record, while Clinton and the other candidates may not want to criticize the existence of hedge funds, I sure as hell will… I think they’re a big part of what is wrong with American capitalism and provide no social or economic benefit… in fact, the often are quite harmful. To wit.

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Not so much, Bernie…

I’ll be honest… I LIKE HILLARY CLINTON. I like that she blows off the press and that she drops straight, unequivocal quips about abortion. This race ain’t going to be like 2008, it’s going to be her this time and that brings me to the thing I like best about Clinton, that there isn’t a single Republican who can beat her. Not one.

I also like Bernie Sanders. I think he’s fighting the good fight, trying to do something about out of control income and wealth inequality. While we may not agree on solutions, we do agree on the problems and that makes us kissing cousins versus the Republicans who can’t even acknowledge that there is a problem. What kills me about Bernie is that same fucking thing that’s killed me about every fucking leftover socialist, the ability to drop a quote like this:

Hence Sanders’s admonition to CNBC this week: “You don’t necessarily need a choice of 23 underarm spray deodorants when children are hungry in this country.”

Yeah, but the problem is that the number of different deodorants has absolutely nothing to do with childhood hunger. The problem of childhood hunger is related to a Congress where the majority wants to punish people for being poor because they took the wrong fucking lesson from Matthew 25… do your best, but don’t do nothing (forget the material aspect of the Bags of Gold parable) and take care of those who are marginalized. So, why not make it about that rather than consumer goods? Because the argument he’s making is a typical command economy socialist argument, the same one that’s been failing for 100 years.

The problem isn’t capitalism, the problem is that we aren’t MANAGING capitalism.

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Dumb and Dumbererererererer

So, there’s this article in the DMN about the city elections in early May and the effect they’ll have on whether the Trinity Toll Road becomes a thing. Obviously, I started writing this the week after the election but I got busy living my life and put it aside. Here, I offer my thoughts as a now FORMER Austinite and current Dallas resident (at this point I only cry a little in the mornings and when I write that I’m ‘a current Dallas resident’).

When it comes to stupid, I want to point out that no one in Dallas has a damn thing on this councilmember who, like so many politicians destined to see their political careers in flames, has made the mistake of confusing causation with correlation…

“They are wanting to make sure we continue with what we’ve been working on,” (Councilmember Monica) Alonzo said of her constituents in West Dallas.

Alonzo is a big fan of the Trinity Toll Road, in case you didn’t know (she’s also fond of using ARE and WITH when it’s completely unnecessary). While no one has bothered to poll her constituents, who are mostly five guys trapped in that Waffle House near NW Highway after a bachelor party that went all kinds of wrong, it’s believed they (LIKE THE REST OF THE DALLAS) think the tollroad is a hellacious idea.

Mark Clayton in East Dallas (which is NOT Austin, by the way … and it’s not fucking LIKE Austin either, so quit lying about that), is running really close to CM Alonzo in thinking that he won because he listened to voters (not really, they just liked you and there weren’t that many of them so don’t get a big head about it and all… you’re a Councilmember which, while a step above a State Representative or Senator, still is pretty low on the public service totem pole). He’s someone we like because he’s going to kill the TTR dead, like the cockroach IT FUCKING IS.

Finally, let’s all remember, when we talk about this asstastic idea that this picture needs to come to mind. And the toll road would be under water in this picture.

Trinity Flood Plain a the MHH Bridge

It’s also worth noting that this picture isn’t even of the really bad flooding we’ve seen over the past week.

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Great Article on Toll Roads

Apparently, this session of the Lege was all about wimmins innards, guns, and gays… seriously, they did dickall else which isn’t a surprise since you people elected folks with sub 70 IQs in an effort to show that black man in DeeCee that you weren’t going to take his crap. Yeah, you elected this bloated bag of larded stupid

jonstrickland

as part of some sort of Faustian bargain which is ending in tears as these things inevitably do. Spite isn’t a great decision making aid in a polling place as it turns out.

Transportation infrastructure went largely unaddressed which means TXDoT has another two years to gut through a serious cash crunch. In that vein comes this from the DMN about toll roads and RMAs which does a fantastic job of pointing out that it’s all a massive FAIL.

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Adler and the Great Tax Dodge

This is just one of the most poorly thought pieces of writing I’ve ever encountered…

There is nothing meaningful about this tax cut. You’re going to raise the rate, and then give homeowners a larger exemption which will be paid for on the backs of renters and the people of Austin in terms of reduced services.

And the most disingenuous part of this is that no one on Council, least of all Adler, will tell the truth about what happens next year with just a moderate 3% increase in value (Surprise! Your tax relief was only for ONE DAMN YEAR! Congratulations! You elected a man who makes Not Brewster Leffingwell look positively dynamic in exchange for an infinitesimal tax cut that will evaporate in a year! Well done!) and the year after. And the year after that. You will never get ahead and that exemption will always be worthless.

But let’s not be too hard on the folks who’ve worked soooooo hard to craft this…

In this case, financing a modest homestead exemption acknowledges the struggle of homeowners across Austin whose incomes have remained relatively flat, while their home values have skyrocketed in the city’s hot housing market. An exemption signals that homeowners are a key part of the community who contribute considerably to Austin’s economy and ventures that make the city better. And it should not be overlooked that a homestead exemption creates an incentive for homeownership that helps families build wealth. Those are values that should not be sliced and diced.

Modest? This isn’t modest, it’s a drop in a swimming pool. It doesn’t absolutely nothing, meaningful or otherwise, to help homeowners. But it’s the part about the city’s hot housing market that really has me steaming… in some cases people have seen the value of their homes increase by 10-20 times their original purchase price. They are, in a word, RICH. The market, which depends on people wanting to move to Austin, has already helped them build wealth. A $50 tax cut isn’t going to help anyone afford more home. Sorry, it’s just not. We are subsidizing rich people by reducing public safety and closing swimming pools for poor kids. Nice work, Adler… you are quite the man of the people.

And, despite the feverish rantings of the disconnected from reality asshat who wrote this, this does NOTHING to address affordability in Austin. Only supply can help that and I don’t see Adler doing much to increase the supply of affordable housing in Austin.

The joke, if you haven’t realize, is on you, Austin.

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What Really Hurts Hillary

The right will, at times in concert with the far left, try to throw things at Secretary Clinton like Benghazi, emails and her wardrobe. None of that will stick to her but what can are problems at the Clinton Global Initiative, which her husband (you remember him… the one President since 1980 to get to full employment WHILE running a surplus) runs. Most of the stuff stuff there now is generic rich assholes claiming that their donations bought them some kind of influence with the Secretary all presented without a shred of proof.

What does hurt, because it hits at the core of her campaign messaging, is this

Hillary Clinton may be running for president as a champion for the middle class, but the Clinton Foundation’s interns do not get paid.

“Businesses have taken advantage of unpaid internships to an extent that it is blocking the opportunities for young people to move on into paid employment,” Clinton said at UCLA in 2013. “More businesses need to move their so-called interns to employees.”

That doesn’t happen at her own business, the Clinton Foundation that Bill started in 2001.

I’ll grant that a lot of interns are doing it for a spot on a resume and usually have the wherewithal to do what is essentially charity work. However, explaining that is a lot harder than making the attack that Hillary isn’t a hypocrite. So, what’s the best way out of this? Someone (que Bill) needs to own the issue and FIX IT.

Like today.

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Tesla, this is why you suck…

Dear Elon… nice work on the model S. I’ve ridden in two and I have to say it’s an outstanding car. I wish I could say the same about your lobbying efforts in Texas, but it’s just not possible. You’ve been outspent 40:1 which is pretty bad, but it’s not really what killed you… the dealers can only do so much damage. No, the real problem is that your folks didn’t sell this right to a Lege which is dominated by teabaggers who are best persuaded from the grassroots up. Instead, you ran it from the lobbying level and the battle was lost before it even began.

Anyway, I’ll look forward to buying a Chevy Volt. I know it’s not as nice, but at least I can buy one in Texas.

xxoo,
McB

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