SamSaid!

DUAL STANDARDS

    It takes a while for some things to register but I think I have finally figured out that there are two kinds of money in this country. There are REAL dollars such as those in your pocket, purse, wallett, IRA, 401K, savings accounts, checking accounts, etc. Then there are TAX dollars  –   those that our governments have taken from us in various ways.  According to the National Taxpayers Union, every thing we earn up to about May 20th of each year goes to taxes. Over 4 1/2 months. That's an awful lot of tax dollars.

     But tax dollars are different. If someone takes my real dollars, they face the real possibility of spending hard time behind bars  –  like maybe 2-5 years or even 5-10 years. . They call it theft, robbery, larceny, grand larceny  –  harsh terms.  When somebody steals $1,000 of REAL money from another citizen, it can be a very big deal.

     But with tax dollars, it seems that a different standard applies. When the government takes your real dollars and converts them into tax dollars it's about like taking a bucket of water and dumping it into Lake Superior. The money loses its identity and disappears into that big pool in Washington or Sacramento. Now, it belongs to nobody. It's just……..there. And the terminolgy changes. When persons of authority (or access) decide to dip into that pool to take a bucketful here and there and use it for their own purposes, it's called “missing funds”, “misappropriation”, “mis-use”, or (occasionally) more pejorative terms like “fraud” or “embezzlement”. And the penalties if the perpetrator gets caught are more like 30 or 60 days suspended sentence, probation, or maybe a few months of community service.The prevailing attitude seems to be. “no harm, no foul” since the money doesn't belong to anyone.

     When the money goes to Washington, there are legions who just can't wait to spend it. While some may profess to be cost conscious, that brief delusion simply precedes the overpowering impulse to spent the money. Conversely, there is no real incentive NOT to spend it. After all, it is there, and it belongs to no one.   

     George Bush is right. The only brakes on big time governmental spending  is not to sent the money to Washington in the first place. That doesn't necessarily prevent outright waste or deter deficit spending, but it can force prioritization. Neither will spending limits  eliminate the indifference to mis-use of tax payer dollars. It won't for example prevent the IRS from looking the other way as Jesse Jackson pays for his extr-marital dalliances with tax grants from the Feds.

     The reason is simple. Tax dollars are not real dollars. They belong to no one. Dollars NOT taxed are real  — they are ours.

BROADCAST JOURNALISM

     A few weeks back, Paula Zahn jumped from Fox to CNN. The move really didn't create headlines, but several comments were made to the effect that CNN wanted to add a little more sex appeal to its lineup of commentators, and Ms Zahn fit the bill. CNN stoutly denied that motive, and the feminists were outraged by the assumption (accusation ?) that Ms Zahn's sex appeal outweighed her journalistic skills. When I read about the latter reaction, I either choked or laughed and spilled coffee on the sports page. Fortunately it was on the NBA standings so no harm was done.

     Let's face it  –  Ms Zahn is a very attractive lady. The feminists must be totally oblivious to the game being played by the network and cable channels  i.e., “Our good-looking talking heads are better looking than your good-looking talking heads”. Anyone flipping from channel to channel can hardly miss it. Not only do the broadcasters  feature a pretty face, nice smile, even teeth,  and a stylish hair-do, but from time to time a cheesecake camera angle treats the viewer to a generous expanse of well rounded thigh. Ms. Zahn qualifies on all counts.

     You may as well face it, ladies, TV journalism is not for plain-janes or homelies. Maybe accounting or engineering, but not TV. An extensive vocabulary and good writing skills will take you a long way, but good looks gets you a job. For example, take the case of Greta Van Susteren. In a move that some might describe as “tit-for-tat” (possibly an inappropriate term) she moved from CNN to Fox, stopping along the way for a major facial upgrading. Big change. Greta is not my favorite commentator and I do not share her enthusiasm for the Church (so-called) of Scientology, but she sure knows the rules of TV journalism. Take a look and decide for yourself!!

THE TWIN DEVILS

     I spent over 30 years as a part of Corporate America  –  20 of them at the Headquarters level. Our company, like many others, was driven by EPS (earnings per share), IAT (income after taxes) and the stock price. The company thrived for over 100 years and in the process survived its share of crises and tough times. Then it went down the drain and only a faint footprint in the sand remains. Gone.

    The company didn't fail because of technological change, the obsolescence of products, market changes, or foreign competition. It failed because of Greed and Ego. I call them the twin devils of management. When powerful top management becomes possessed by the twin devils, bigtime trouble looms straight ahead. And did it ever.

     Enron is bankrupt  –  financially and morally. The result of the entire investigation may result in criminal indictments, but the real crime is leading a big compnay into failure. All because of the twin devils  –  greed and ego  –  which overcome good judgment and morality all too frequently.  Now we have powerful guys taking the fifth and running for cover to protect their hides after they have cashed in for millions. And they knew what they were doing as they did it—  they just thought they could get away with it, or at least take the money and run, leaving behind the wreckage. And the ruined lives of many.

     From my experience, when there is a development that potentially can affect EPS, IAT or the stock price of a Company, all hell breaks loose upstairs at HQ. That's the way Corporations work. Nobody will convince me that the Enron top guys “didn't know” when hundreds of millions of dollars were involved. . Baloney  –  and the Andersen people knew also. A kindly assessment might be that they got in too deep and didn't know how to get out. And that's a very generous assessment.

     We can feel sorry for the Enron emplyes who put all of their eggs in an Enron stock basket. No doubt they were encouraged by the CEO, but I think they were more interested in a quick killing than a balanced portfolio.  Nobody twisted their arms. It was their choice and they paid the price. It is aways tough to learn that one's trust has been misplaced. The inevitable litigation will take years and the lawyers will smile all the way home from the bank.

     Unfortunately, some of our Congressional Committees smell blood and want to severely punish anyone remotely tied to Enron top managment. For the regulators, it is a golden opportunity to regulate more and more. In the process, I hope they don't over-react and screw up a good 401K/IRA system. But even if there is reform, there is no guarantee that all employes enrolled in 401K plans will make sound financial decisions. And legislative reform will not remove the twin devils from the Board rooms  —  from non-profits  –  or from Governments.  It is not just Corporate America or Enron.

Its all in the eye of the beholder

     It's the bottom of the ninth, bases loaded, score tied, and the home team at bat. The count goes to 3 and 2 and the pitcher throws a hummer right at the outside corner of the plate. It either nicks the outside corner for a strike, or it misses by a whisker for a ball. Strike three, or ball four. One way, the game continues; the other way the game is over. The ump decides. His call.

    In baseball, disagreements over strikes and balls are almost a tradition. No game would be complete without them. Players nowadays have to be careful since they can be ejected from the game for arguing too strongly. But as much as umpires are maligned, their integrity isn't questioned. Judgment yes, Honesty, no. I guess it is always possible for Las Vegas gamblers to get to an umpire to call the critical pitches, “their way” but at this point, such an allegation hasn't even been made (at least to my knowledge).  

      Close judgment calls are made in many sports, including Olympic  ice skating. Now that the Russo-French skulduggery has been uncovered, the cloud of suspicion may spread far beyond Salt Lake City. Maybe the “insiders” know about  the dishonesty (preferences?) of judges, umpires, referees, etc, but to most of us, their impartiality is assumed and accepted. We really don't think of the outcome being “bought” before the first pitch, the kick off, or the first serve. The long range fallout of the Russian/French perfidy just raises a little doubt where there may have been none before.

     Was the pitch outside for ball four, or did it catch the corner? At 90 mph from 60 feet, the ump doesn't have much time to decide. His call.

     It is not that critical that the Canadians got their gold medals. It's more important that the Russkies and French got caught. Hang 'em out to dry!!

It's tax time again

     When George Bush identified a tax reduction as a major plank in his Presidential Campaign platform, I signed on in a hurry. Paying Federal taxes is not one of my favorite sports. I was convinced that his tax message would resonate throughout the country and it did  –  but not to the extent that I had imagined. I was sort of puzzled over a public reaction that was lukewarm. Then I spotted an article which published 1999 IRS data obtained from the Joint Economic Committee of the Congress. Mind you, this is 1999 data.

     The top 1% of all US earners paid 36% of all of the personal income tax. The top 10% of earners paid 67% of the personal income tax and   –  get this  –  the top 50% of earners paid 96% of the personal income tax that year. Conversely, that means that the lower 50% of the earners in the US paid only 4% of the personal income tax. It figures that folks who pay little or no income tax don't get too excited about a tax reduction.

     Obviously, you have to pay taxes in the first place in order to qualify for a reduction. How do you get a reduction from taxes you didn't pay? But of course, the Gebhart/Daschle “tax and spend” Democrats quickly dubbed George's program as a tax break for the rich. And of course we might also include some Republicans spenders who are hot on subsidies. When a tax reduction is in order, don't you start with the people who paid the taxes  –  or is that too simple? But Dubya's message did resonate  –  with real tax payers.

     Sweeping all of the camouflage aside, the kernel of the issue is that the Congressional big spenders want no part of slowing down the revenue headed for Washington. These guys have never seen a tax dollar they couldn't spend. Our tax structure functions to send more and more money to Washington without changing so much as a comma in the tax code. Percentages and brackets are their allies. When you get a raise, a promotion, or a bonus, better discount it up front. Big Uncle will get his share  –  for sure..

     A battle cry for the American Revolution was “taxation without representation”. Now we have taxation WITH representation. I guess we are better off  –  or are  we? It's tax time again, so while you struggle through the forms think about your noble sacrifice as one of the 50% who assume 96% of the country's income tax burden. We all can accept taxes up to a point. But maybe enough is enough.  Yet, we know that our tax dollars will be well spent  –  right??     

www.— ALPHA

     I have a wife, three daughters, a son, and the right number of in-laws. Over the past 3-4 decades I have freely shared with them my views on a wide variety of subjects. On occasion, some of them actually ask for my opinions; however, I never allow the absence of a request to deter me from relaying information they need to know.

    Over time, many of these conversations have been the equivalent of “preaching to the choir” since for the most part they are quick studies. Not all, mind you, but most of them. So, a while back, my software wizard son volunteered that I should get my own website so that I could offer my views to others. Through computer gyrations I cannot hope to understand he has set me up with “SamSaid” which is now my avenue to the rest of the world. I suppose that there will be those who take issue with my comments, but I don't mind that since somebody has to be wrong.

     I didn't get to substantive matters today since I was playing golf. Everyone has priorities and golf is one of mine. Certainly not half-pipe skiing. I'll probably pick the subject when I get up tomorrow at 5AM  –  and before I go back to bed at 5:10AM.

     I hope nothing important happens between now and then!!

Our coming trip to Hawaii!

Jake will be with us in 2 weeks. We will be vacationing in Waikoloa and his wife will be with him. They do not golf but that is ok. They will likely walk the beach with us.

This is the first post to the newly created SamSaid! Web Site.  Stay tuned for the upcoming content!