Archive for April, 2010

“I do think,” you may have heard President Barack Obama say about a group of Americans last week, “at a certain point you’ve made enough money.”

And if you hadn’t heard it before now, you may be wondering who he was talking about.

Perhaps he was speaking to Hollywood — producer/directors such as George Lucas or Steven Spielberg, who were paid $170 million and $150 million, respectively, according to Forbes magazine’s 2009 list. Less generous, but still better than I and probably you, were Jerry Bruckheimer at $100 million and Atlanta’s Tyler Perry at $75 million. Or actors such as Harrison Ford ($65 million) or Adam Sandler ($55 million).

Then again, he might have been talking to America’s television stars. Dr. Phil (McGraw) pulled down $80 million, Forbes reports. Simon Cowell of “American Idol” was close behind at $75 million. And there’s Oprah, our highest-paid celebrity, at $275 million.

But Oprah is one of the president’s biggest backers, so …

Continue reading Exactly who ‘makes enough money’ in Obama’s eyes? »

What a difference a month makes. A 10-day month, that is.

Crossover Day at the Legislature, which this year came on March 26, was not a good one for conservatism in Georgia. Lawmakers, particularly Republicans who claim to support limited government, failed to pass some important good-governance measures and succeeded in raising taxes.

But between that 30th day of the session and today’s 40th and final one, they went some ways toward righting the ship.

Oh, the hospital tax lives on. And lawmakers made it worse, not better, by rolling it into a bill to increase the state’s user fees and eliminate its quarter-mill property tax and capital gains taxes on retirees.

Raising some fees is defensible as a move to stop subsidizing certain services by charging users the full cost of providing them. And it’s good that the original bill’s overly broad text was tightened considerably. But lawmakers can’t let fee hikes become a regular money grab.

Ironically, the bigger …

Continue reading Finally, legislators take steps in the right direction »

I’m back blogging after a week away from it, although the pace may remain somewhat light this week as I continue working on a special project that should roll out this weekend or early next week.

In any case, I wanted to weigh in quickly on a few things:

1. Arizona’s new immigration law

I have lived in a country (Belgium) where the police can stop you at any time, with no discernible cause, and ask to see your “papers.” It is an unnerving feeling, even for those people who are present perfectly legally and have nothing to fear. It makes you nervous even to pass a policeman, who without such a requirement would have no reason to stop you as you walked past him on the sidewalk.

In the case of a foreign-born resident — again, even a legal foreign-born resident — you are required to carry documents which you greatly fear losing because of the time, hassle and even difficulty involved in obtaining them. For instance, I technically was supposed to have my passport with me at all …

Continue reading Catching up — AZ immigration, Ray Boyd and the GA GOP »

The government’s lawsuit against Goldman Sachs, announced Friday by the Securities and Exchange Commission, is a doozy. It alleges that the Wall Street firm defrauded investors in a synthetic — remember that word “synthetic,” because it’s important — collateralized debt obligation, or CDO. The charge is that Goldman let an investor named John Paulson help put together the CDO without telling other parties that Paulson was betting against it, thereby dooming them to lose money.

So far, so scandalous. But that’s not the end of the story.

First, about that word “synthetic.” The Wall Street Journal explains that

the investment at issue did not hold mortgages, or even mortgage-backed securities. This is why it is called a “synthetic” CDO, which means it is a financial instrument that lets investors bet on the future value of certain mortgage-backed securities without actually owning them.

Yet much of the SEC complaint is written as if the offering included actual pools of …

Continue reading Why SEC v. Goldman is far from open and shut »

Right now, I’m thinking about food. And people.

As I post this column, I’ve just ended the Five-Day Food and Water Challenge. Some of my fellow congregants at Veritas Church are participants; the annual event started at Willow Creek Community Church in suburban Chicago.

The rules are simple: Try to eat no more than does the average person in the world’s bottom economic half. It’s not the diet of the very poorest, but it’s still a shock to the average American’s system: Just three (cooked) cups of rice or beans each day. Only a handful of alternatives are allowed — plain oatmeal or a tortilla, very little fruit or vegetables, no more than a chicken nugget’s worth of meat per day. And no drinks besides tap water.

Let me confess first that I haven’t been perfect. I’ve allowed myself one cup of coffee a day; a years-long habit is hard to drop immediately. On the third night I caved in and ate a supplemental bagel — OK, a bagel and a half — but I still went …

Continue reading A reminder to look for the circle above the line »

I attended part of yesterday’s tea party at the Gold Dome, and a couple of things were apparent: The crowd was significantly smaller than last year’s massive rally (suggesting in part that Sean Hannity > Neil Cavuto as a crowd attraction), but its members remain passionate if the conversations I had are any indication. I also think it would be a mistake to view the smaller size as an indication of a waning movement, if only because I find it hard to believe that people who were upset last year about the stimulus and bailouts would be pleased with the direction Washington’s taken since then.

A lot of what was said by the speakers and written on the signs was, a year after the first big rallies, pretty much predictable. That’s not to say it’s stale or somehow bad; it’s just that the message and the motivation haven’t really changed. As for the buzz that there would be infiltrators trying to make the tea partiers look bad, there seemed to be none of that in Atlanta. I saw only a …

Continue reading And they wonder why people are upset »

Add another half-trillion dollars to America’s debt.

No, Congress hasn’t been on another spending spree. (Yet.)

I’m talking about another $600 billion in debt — almost $2,000 for every man, woman and child — that state and local governments have racked up but don’t recognize.

I’m talking about money that we owe to just one category of retirees: Teachers. Money that we already would have known about if government followed the same accounting rules as private companies.

Add that money to the teacher-retirement debt we already knew about, and we’re talking about almost $1 trillion.

Whoever said “trillion” is the new “billion” wasn’t kidding.

These figures come from a new report, “Underfunded Teacher Pension Plans: It’s Worse Than You Think.” The authors argue the funds underestimate funding gaps by overestimating the rate of return on their investments. They say the funds could avoid this problem by following private-sector accounting rules, which …

Continue reading A fiscal black hole grows deeper »

Expectations are high that financial reform will be the next big issue that Congress will tackle, particularly now that Senate Majority Leader Harry Reid is talking down the prospects for getting to immigration reform anytime soon.

And in typical congressional fashion, the reform bill will probably pass and become law before the bipartisan commission empaneled to determine the causes of the financial crisis is finished with its work.

Whether this is a problem depends on how you look at it.

On the one hand, there seems to be little immediacy for passing a financial reform bill, and therefore good reasons for waiting until we better understand the causes of the crash and panic. The system has by all accounts been stabilized, albeit at great cost. The key to avoiding future panics and costs — and thus to producing any good legislation — is to understand what went wrong and why. “Greedy bankers” doesn’t cut it; greed and bankers, and greed among bankers, existed long before the …

Continue reading Financial reform and what we still don’t know »

Harry Truman famously wanted a one-armed economist, so that he could get the expert’s advice without hearing “On the other hand….”

With that in mind, I present these opposing views of the economy.

The first hand belongs to the folks at the National Bureau of Economic Research, which is charged with officially declaring the beginning and end of recessions. From a McClatchy article:

The bureau’s Business Cycle Dating Committee met last Friday and concluded that the jury is still out on the recession’s end, announcing that decision on its Web site Monday.

The committee reaffirmed that the recession began in December 2007, but its seven members couldn’t determine whether the recession has ended.

“The trough date would identify the end of contraction and the beginning of expansion. Although most indicators have turned up, the committee decided that the determination of the trough date on the basis of current data would be premature,” the committee said in a statement. “Many …

Continue reading The economy: Still in recession or about to boom? »

At Volokh Conspiracy, one of the best lawyer blogs around, a tongue-in-cheek take on adding diversity to the Supreme Court when replacing John Paul Stevens:

With Justice Stevens having announced his retirement, all eyes now turn to President Obama’s purported short list: Elena Kagan, Merrick Garland, and Diane Wood. Obama will have a tough choice, as he is picking from three very different candidates. No matter who he picks, his selection is likely to break down some major barriers.

First, consider the broad range of choices Obama faces. His shortlist consists of former law clerks to a wide range of the liberal Justices of the 1970s and 1980s. Obama must choose between a Brennan clerk (Garland), a Marshall clerk (Kagan), and a Blackmun clerk (Wood). Further, the shortlisters differ dramatically in that they had different high-level positions in the Clinton Administration. Will Obama pick the former Deputy Assistant Attorney General for the Criminal Division (Garland), the …

Continue reading Weighty questions indeed for Supreme Court pick »