I hate memes… I hate government regs… I hate taxes

 

I hate memes

A well-designed meme, like this one spotted on Facebook, resonates so well with so many people that it either forms the basis of new beliefs or confirms a bias.  Bankers are evil, the story goes.  They caused the financial crisis and screwed all of us. So, this meme will get shared by many. 

I see it in a larger context of people depending on others to protect them from their mistakes.  Sorry if you suffered during the financial crisis. So, did I.  So did many others.  But, when you sign up for a bank account, you sign an agreement to keep your account balance positive or pay an overdraft fee.  Giving you and anyone in your circumstances a break increases costs for the bank.  So, it’s reasonable to ask who should bear those costs.  Should it be the shareholders of the bank?  Before your amygdala prompts an immediate “yes,” consider that, if you own shares in a mutual fund, you and your mutual shareholders probably own stock in banks.

But if not the shareholders, then who?  Well, those costs will be passed on to other customers in some way – perhaps in higher ATM fees or higher interest rates.  No one will know exactly except the bank’s senior officers.  But, trust me, someone will pay.

And, so, here we are. 

People get themselves into bad situations and sometimes make mistakes.  That’s life. But who should take responsibility for those mistakes other than those who made them?

I hate government regs

It’s fair to point out that banks have raised fees in the years since the financial crisis.  Under pressure to reduce risky lending and strengthen their balance sheets, they sought new ways to generate revenue.  Our government has played a huge role in creating this unintended consequence and the crisis itself.  The Clinton administration liberalized the way in which the main providers of mortgage financing – FNMA and GNMA –could raise capital. In turn, those quasi-government institutions expanding their portfolios of mortgage bonds.  The Federal Reserve lowered interest rates during the Bush administration and GWB ran for reelection in 2004 promoting the highest rate of home ownership in our history.  We all know what happened next.  

In the wake of the financial crisis, Congress passed the Dodd-Frank act which directed government regulators to create rules that discourage risky lending and required banks to increase the amount of capital they hold to protect against losses. Seems reasonable, right?  But it wasn’t the big banks at the heart of the crisis of that suffered under this new regime.  It was community banks, those more connected to their customers and community, who were seriously challenged to comply.  The result is that many sold out to larger competitors, creating more big banks.  

The recently announced acquisition of SunTrust Bank by BB&T is the most visible of these events. When concluded, the merged entity will be America’s sixth largest bank.  The merger is driven by the need to drive down costs in order to retain more capital, invest in new technology and comply with Dodd-Frank’s regulations. Ironically, one of Dodd-Frank’s architects, Senator Elizabeth Warren (D-MA), has criticized the merger because it will create another “too big to fail” bank.  But it’s the conditions imposed by the law that are driving the consolidation of the banking industry.  

No one should be surprised by this. Sen. Warren seems to live in a parallel universe where what’s right is wrong and vice versa. 

I hate taxes

In the latest episode of The Blue State Follies, there’s a kerfuffle in Albany over a shortfall in tax revenues.  That’s bad news for New Yorkers as the legislature begins to develop the state budget. Last November’s election turned complete control of the state legislature over to Democrats.  So, what do you suppose their reaction to this bad news might have been?  Wait for it… Yes, that’s right!  Let’s raise taxes.

But I’m getting ahead of myself.  The US Census Bureau has reported that New York’s population loss has exceeded that of any other state. During the campaign season – while running for a reelection that matched his father’s three terms as governor – Andrew Cuomo informed us that New York was losing population not because of high taxes and inhospitable business conditions but rather because of lousy weather.  As I sit here in upstate New York in February, it’s easy to agree with that assessment.  

To his credit, when his party cried out for higher taxes to close the gap in our state’s budget, he responded that he was concerned that people would move out of New York to avoid paying higher taxes. 

Wait!  What?

WHO WILL LEAD?

We Trust the Government We Don’t Trust

American’s trust in government has been in decline since the Kennedy/Johnson administration according to Pew Research.  Yet we seem to ask more and more of it.

Trust is more likely to occur in local communities because we tend to trust information we take from direct experience.  We relax a bit when dealing with people we know or with people whose reciprocal expectations match our own.  In countries with small, relatively homogeneous populations, government can successfully play a larger role in daily life.  The Scandinavian countries, so often cited as a model by liberals, are good examples.  Each has a population smaller than New York State that is over 90% native born.

The US, on the other hand, has a population that includes over 40 million immigrants, closing in on 15% of the total.  If we add first generation Americans, we have about a quarter of the population whose reciprocal expectations are not aligned with more established citizens.  The last time we found ourselves in a similar demographic mix was shortly after my grandparents immigrated here in the 1910’s and 20’s (from what was then a s***hole country).  What followed was a backlash and, in 1924, Congressional legislation to limit immigration, the remnants of which form the basis of policy today.

The social mechanisms that have enabled us to assimilate have been left behind as technology – from ATM’s, smart gas pumps, and self-checkout at Wegmans to video games and social media – replaces person-to-person social interaction.  People from different walks of life simply don’t talk with one another as we once did. 

In parallel, we have observed a breakdown of trust in institutions.  We stopped trusting our government when government stopped being trustworthy -- during the Vietnam War and Watergate.  We stopped respecting social institutions -- political parties, organized religion, national media -- when they stopped meeting our needs.  And, we stopped trusting people with different political beliefs when their politics became more extreme. 

So, at a time when we need to learn to engage our neighbors, become more welcoming to immigrants and litigate our differences locally, the social fabric necessary to our success has been torn.  At a time when more of our resources should be directed within our communities, Washington is in a pitched battle over how our money should be distributed.

And, let’s not overlook how money affects this paradigm.  The lion’s share of our taxes is not collected by our local communities or state government but rather by Washington.  It takes money to administer laws and enforce them.  So, the rules made in Washington affect us more than those made locally.  We can see the impact in our schools and our transportation infrastructure.  State and local governments can’t do much without federal support. 

So, the cycle reinforces itself.  More money goes to Washington; more of the laws that affect our local communities are made there; and, we ask more of Washington than of local governments that could be more responsive to our needs.  By paying taxes and demanding programs of our Congressional representatives, by asking them to legislate right and wrong, we express our trust in the federal government implicitly.

Isn’t it ironic?

WHO WILL LEAD?

Bartender, apologies for everyone

When people ask me about this blog, I tell them it's intended to piss off two kinds of people-- Republicans and Democrats.  Lately, I've been thinking that's too narrow. It's really intended to piss off two kinds of people -- men and women.

Last week's attempt to piss off women may have backfired (How to insult women). All of the comments and messages I received were from women and all were positive. Allowing for the possibility that I didn't hear from those were offended (a non-respondent bias in statistical terms), I would like to apologize for implying that women should differentiate between a few joking references to their gender and the rape culture that seems to permeate college campuses. (I was pleased that 30% of readers clicked to watch the included video.)

While I'm in an apologetic mood, I would also like to apologize to gun rights advocates for suggesting that we amend the Constitution following the Sandy Hook shooting (The US Constitution was designed to be amended) and for providing a legal brief to undermine the claim that individual gun rights are supported by the Second Amendment (The Right to Bear Arms: anAmerican Evolution).

Sorry to all of you who are “Feelin’ the Bern” for my assertion that, were Sen. Sanders proposals adopted, the US economy would be flushed down the toilet and for further suggesting that those who don't know that are either “ignorant or stupid”. (Let’s Understand Just What Socialism Means to Us) By the way, if you're disappointed Bernie won't be in the White House next year, you could always move to Venezuela. I suggest you pack a lunch.

To those who think we should build a wall along the Mexican border, I apologize for suggesting the opposite (Open the Border! Wait, It's Already Open!)

To all you Pro-lifers, I am sorry for exposing the unconstitutional and unaccountable practices of lawmakers and police who deprive women not only of their reproductive rights but also their freedom (Orphan Black, Margaret Atwood and a Woman’s Right to Choose).  And, while I am on the subject, I should also apologize for calling out Republicans for the hypocrisy of advocating that government stay out of our lives while supporting the agenda of the Religious Right (Strange Bedfellows: Conservatives and the Religious Right).

So long as I am talking to you, I should also apologize for suggesting that the subject of gay marriage is not about your religion.  It's about love.  (It's Not Religion... It's Not Politics... It's Personal)

To all you liberal New Yorkers, I would like to say I'm sorry for dissing our governor whose policies that purport to promote business are actually driving businesses to leave the state (The Hunger Games: not everyone is a winner). His ban on fracking doesn't help (Fracking, New YorkTaxes and Twitter).

 

To you climate change deniers, I offer my apology for saying that you haven't a leg to stand on (Kurt Vonnegut, Enrico Fermi and Climate Change).

To Europeans, who are whistling in the dark when it comes to dealing with Russian aggression, I apologize for comparing you to Chamberlain, the great appeaser (What’s Russia Really Up To?).

To those of you who think America is in decline, I apologize for espousing the view that America should be celebrated for its freedoms, including its model of economic freedom (The American Dream is Alive and Well).  What has failed us is the Blue State model of high taxes and overregulation.  Oops!  Sorry again!

While I am on the subject, I suppose I should apologize for the sacrilege of my claim that raising the minimum wage and expanding 60’s era anti-poverty programs are a waste of effort (Obama, SNAP and Conservative Americans).  Sacrilegious though it may be, I still struggle to understand how the programs that have led to more poverty in the 20^th Century will do any better in the 21^st.   Sorry.

 

And I am sorry for pointing out to labor union liberals that your model hasn't worked since the 1950's and it won’t work now (The Disunion of ‘dis Union).  Ditto to those married to our outlandishly expensive and closed-minded university system (When Will the University Bubble Burst?).

If you're among those who think that capitalism is evil, I am sorry for asserting that the only economic system that can generate the money needed to address society’s ills is free market capitalism (Time Travel and Our Social Welfare). Further, I should apologize for suggesting you have the luxury of complaining about our system because the system has improved your lives (otherwise you’d be too busy working to have the time to complain).

Now, if you detect a note of sarcasm in all these words of contrition, you're right on.

However, there is one group to which I offer my most sincere apology -- the 73,138 of you who have taken the time to visit my website, read, click and comment. 

Why am I apologizing to you?

Because...        I...         Am...    Done!

WHO WILL LEAD?

Fracking, New York Taxes and Twitter

Have you ever sat down to write a brief, polite reply to an email and ended up writing a page and a half instead? Oh, c’mon…  you know you have.  It’s very therapeutic, isn’t it? When it happens to me, most often I have the good sense not to press the Send button.  Sometimes, not.

It all started with a Tweet.  I came across this graphic on the Business Insider website.  It shows changes in population by state and county.  Here in New York State, we are losing jobs as indicated by the orange color.  That Navy blue spot at the top of North Dakota indicates that lots of people are moving there.  ND has permitted hydraulic fracturing (fracking), creating energy jobs and an influx of population. 

So, I tweeted, “No fracking in NY, people move out. Fracking in ND, people move in. Whose economy is booming?”

I got a long reply from an employee of the New York State Department of Labor.  (I don’t believe he was replying in an official capacity and I won’t reveal his name.) 

“I took five minutes and pulled up why I don’t want to see NY and Rochester’s economy to go boom,” he started.  Five whole minutes!  Wow!

“Duke Energy has been charged with environmental violations eight times in less than a month
Residents told the Philadelphia Daily News they were awakened shortly before 7 a.m. by the sound of a huge blast from a natural gas well that Chevron was drilling using hydraulic fracturing techniques.”  He goes on to cite several other examples of citizen complaints and accidents and even ventures into a discussion about train accidents that have caused oil spills and death.

After a careful reading, I set out to make a brief, polite reply.

“First, I would like to thank you for your thoughtful reply to what was just a Tweet. I enjoy engaging in conversation with people of diverse backgrounds and points of view,” I began. 

“Before I respond to your comments about fracking, I would like to make an observation more generally about the business environment in NY. In my work, my clients are CEOs and business owners. I can tell you categorically that they feel unwelcome. Universally, they view the Governor's ‘Open for Business’ campaign as a joke.” 

You can see that I was in the wrong mood to be brief and polite.

“Why?” I asked rhetorically. 

“An extraordinarily high tax burden and a regulatory regime that is unresponsive to the needs of business.”

I cited examples of business owners and CEOs who are considering expanding into other states.  Banks, transportation companies and real estate developers would all like to avoid the cost of doing business here.  New York may be ‘Open for Business’ but business owners are walking through the door in the wrong direction.

As for fracking – on which New York has imposed a ban – I suggested that, “The environmental lobby has scared the crap out of everyone on this issue. And fear is a more powerful motivator than anything else. 

“Every source of energy production has had its disasters -- from coal mine collapses to Three Mile Island to the Exxon Valdez. There isn't a month that goes by without one. If you're interested Google ‘oil spills train accidents’. 

“I lived in Philadelphia for six years. It was rare that a year went by without a major oil fire. Google ‘Philadelphia oil refinery fires’.”  I figured if he could spend 5 minutes feeding his confirmation bias, he could spend 5 minutes feeding mine.

Fracking was introduced in the 1940s and there are over 1 Million instances in the US where fracking is used to extract natural gas. “How many accidents?” I asked. 

“President Obama is no slave to the oil lobby. His Secretary of Energy, Ernest Moniz, has pronounced the risk associated with fracking as ‘manageable’. So, let's MANAGE it! 

“As a native New Yorker, I grew up during a time when New York was the ‘Empire State’ for real. The Governor can keep saying we're ‘Open for Business’ all he likes. But, our 35-year track record of job and population losses tells a different story. If you take Wall Street out of the picture, the state economy is pitiful. 

“You can take each regulation and rationalize its reason for existence. But the overall effect of the state government's burden is destroying us.” 

A week later I read that, once again, New York topped the list of states with the heaviest income tax burden.

I signed the email “respectfully” but I am not sure that was true.

WHO WILL LEAD?