Relevant and even prescient commentary on news, politics and the economy.

Social Security and Me: Ayn Rand, the Four Freedoms, the Road to Serfdom and the Leninist Strategy

What the —! Well it occured to me, and not for the first time, that a lot of people really don’t understand my Social Security project and particularly what even some of my friends and allies think is a narrow focus on the nuts, bolts and numbers of Social Security financial reporting. It seems to them to often miss the point entirely. But there is method to my madness (although all madmen claim the same) although that method is based on an apparent paradox: the battle over Social Security is NOT about numbers and in most respects never has been. So why focus on them? And why set up a so-called game called ‘Total Security on Elsinore’ that seeks to abstract Social Security from all societal and economic context? Well the clues are in the post title and hopefully will be explicated below the fold.

But fair warning. There will be a lot about “Me” here. And for people who find me and my writing some combination of irritating, innumerate, illogical, intemperate, and worst of all interminable this probably isn’t the post for you. For others, friends, allies, and foes —–

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Individualism vs. Collectivism: Thanks For the Ammunition, Ann

Ann Romney said in an interview airing Wednesday that her husband has no plans to release additional tax returns, saying “it’ll just give them more ammunition” and insisting that “there’s nothing we’re hiding.”

“We have been very transparent to what’s legally required of us. But the more we release, the more we get attacked, the more we get questioned, the more we get pushed. And so we have done what’s legally required and there’s going to be no more, there’s going to be no more tax releases given,” she said in the interview by NBC News. “And there’s a reason for that, and that’s because of how, what happens as soon as we release anything.”

Romney is releasing two years of his tax returns. Democrats have said what’s he hiding and demanded he make public the last 10 years or more.

Ann Romney also defended Romney’s character and said the “only reason we don’t disclose more is we’ll just become a bigger target.”

“Mitt’s financial disclosures when he was governor are huge if people want to really look and see any question they have,” she said. “The other thing they have to understand is that Mitt is as honest — his integrity is just golden. We pay our taxes, we are absolutely — beyond paying our taxes we also give 10 percent of our income to charity.”

She also said that the couple has had a blind trust since 2002 before Romney was governor and that they don’t know what’s in it.

“There’s nothing we’re hiding,” she said, later adding: “I’ll be curious to see what’s in there too.”

            — Ann Romney: No more tax returns, Tomer Ovadia, Politico, today

An article published recently by James B. Stewart in the New York Times titled In Superrich, Clues to What Might Be in Romney’s Returns, overlooked because it was published on Saturday, the day on which Romney made his Ryan announcement, explains that 2008 and 2009 were banner tax-break years for a large number of very wealthy people whose main or entire source of income comes from stock dividends and the sale of securities. 

The occasion for the article was the IRS’s release last week of “data from the 400 individual income tax returns reporting the highest adjusted gross income, writes Stewart. “This elite ultrarich group,” he says, “earned on average $202 million in 2009, the latest year available.  And buried in the data is the startling disclosure that six of the 400 paid no federal income tax.”

Which suggestions the likelihood that the Romneys paid no, or almost no, income taxes for 2008 and 2009. 

It does not take a math genius or a tax expert to recognize this.  That’s good, because I am neither.  But I am good enough in math (if barely) to know that 2006, the last year of Romney’s term as governor, ended before 2008 began. 

And, thanks to the Romney tax-returns controversy, I know that in 2009 the Department of Justice entered into an agreement with UBS, Switzerland’s largest bank, and other Swiss banks, in which the banks agreed to disclose to the U.S. government the identities of American holders of Swiss bank accounts, and that approximately 34,000 Americans took advantage of an amnesty program that the IRS and Justice Department offered, by which voluntary payment of back taxes and interest and penalties would remove criminal liability and public disclosure. 

And I have followed the Romney tax story closely enough during the last few months to know that the Romneys’ 2010 tax returns revealed a bank account with UBS, apparently opened in 2003, was closed sometime during that year and had $3 million in it when it was closed.  And that, according to news reports, Romney did not disclose this account on his Massachusetts financial-disclosure forms—although, unless my math ability (such as it is) fails me, 2003 ended before early 2007, when Romney’s term as governor ended. 

And that, also according to news reports, the 2010 returns show that the Romneys have a shell corporation in the tax haven of Bermuda into which they apparently were funneling income from overseas Bain investments, and that one day before Romney was sworn in as governor, the corporation’s shares were transferred to Ann Romney, and the corporation was not disclosed on Romney’s Massachusetts financial-disclosure forms.

So, yes, Ann, you’re hiding something.  You’re hiding whatever it is that would give your opponent ammunition, whatever it is that would make your husband a bigger target.  And that ammunition is that, whether or not you and he failed to disclose that Swiss account and any other Swiss accounts you held that were closed before 2010 until a gun was held to your heads in 2009, you and he employed tax loopholes and special tax rates that your husband and (even more so) his running mate plan to expand so as to eliminate the very need for offshore tax shelters.  They plan to make this country an overt tax shelter for the wealthy and, especially, for the very wealthy—that is, for people like you and your husband. They have made that central to their policy plans, while desperately trying to deflect scrutiny of those proposals. 

Stewart writes in his article, “Tax experts I consulted said these results almost certainly reflected aggressive use of tax-loss carry-forwards from 2008, since the stock market bottomed in March 2009 and rallied strongly during the rest of the year.”  Expressly under Paul Ryan’s plan, there will be no income tax at all on capital gains and on dividends.  Every year will be 2008 and 2009 for the Romneys!  Except, of course, for the need for aggressive use of tax-loss carry-forwards, and the like; no more need for that sort of thing.

A lot of eyebrows were raised on Sunday when Ryan, sitting next to Romney in an interview, told Bob Schieffer that he wants to end the tax breaks that apply only to the wealthy.  That’s nice, but of no effect.  A seminal part of his tax-and-budget plan, passed this year by the House, is the elimination of all income taxes on capital gains and dividends.  And although this would mean that many very wealthy people will pay no income taxes or estate taxes, and many other very wealthy people would pay income taxes at a single-digit rate, the elimination of these taxes would apply as well to the non-wealthy who have a capital gain or receive stock dividends, however small.  And so—voila!—Ryan’s statement, made with such earnestness, does not apply to the issue of taxes on capital gains and dividends.  Nor, for that matter, to estate taxes, which his plan entirely eliminates; some non-wealthy people leave small estates, after all.  And semantics is the name of their game, the objective of which is the enabling of ever more vast accumulations of wealth, utterly unfettered by tax obligations.  Pure and simple.

My big fear about the all-Medicare-all-the-time campaign that began last weekend with Romney’s Ryan announcement is that it allows Romney and Ryan to claim the mantle of straight talkers about what they warn is a Medicare-caused fiscal calamity that awaits.  They have yet to explain why, if they fear such a calamity, they propose to reduce federal revenue by trillions of dollars, through their tax-elimination-on-the-wealthy plan.  And when they stress, as they do again and again, that their destroy-Medicare-in-order-to-save-it plan will not end the current program for its current or relatively-imminent recipients (those who are 55 or older), maybe they’ll deign to reveal what programs will be eliminated in order to pay for Medicare for current recipients and baby boomers andand—the trillions-of-dollars tax cuts for the wealthy.

My suggestion: Hurricane disaster relief for the southern Atlantic and Gulf Coast states, which will vote for this ticket en force, and crop insurance and drought disaster relief for the plains states, which will vote for them and their budget plan in almost as large percentages. 

In 2005, Ryan now-famously advised his audience when he addressed an Ayn Rand fan club that they should make no mistake: current politics is a clash between “individualism” and “collectivism.”  And indeed it is.

Now, let’s ensure that the public knows the specifics.  

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CATO Institute and Ayn Rand

Via alternet comes this bit of news:

…John Allison, a former bank CEO and a leader of the Rand movement, has just become president of the Cato Institute, the oldest and most influential libertarian think tank. This received only a modest amount of attention when it surfaced late last month, and you had to be a real political junkie to even be aware of it. But it is a seminal event in recent political history—a dramatic indication of the mainstreaming of the radical right.

What it means is that the Rand movement, which was little more than a cult when the Atlas Shrugged author died thirty years ago, has effectively merged with the vastly larger libertarian movement. While many differences are likely to remain—particularly as far as Ron Paul’s fading candidacy is concerned, given the Randers’ support for abortion and opposition to his foreign policy views —this means that Objectivism, Rand’s quasi-religious philosophy, is going to permeate the political process more than ever before.

Allison, former CEO of North Carolina’s BB&T Bank, is not just going to be the Cato Institute’s sugar daddy. He replaces Ed Crane as president, meaning that he will have day-to-day control over the most significant libertarian organization in the country. Allison is a board member of the Ayn Rand Institute, the orthodox, no-compromise Randian organization, and is best known for his foundation donating free Rand books to thousands of schoolchildren across the nation—a crass exploitation of the fiscal troubles besetting primary schools.

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Ayn Rand v. Thomas Aquinas in Paul Ryan’s Mind

by Mike Kimel

Ayn Rand v. Thomas Aquinas in Paul Ryan’s Mind

Think Progress piece on Paul Ryan.

Think Progress has a post noting that though Paul Ryan used to go around telling people he got into politics because of Ayn Rand, and he required all his aides to read Atlas Shrugged, now he tells the National Review:

“I reject her philosophy,” Ryan says firmly. “It’s an atheist philosophy. It reduces human interactions down to mere contracts and it is antithetical to my worldview. If somebody is going to try to paste a person’s view on epistemology to me, then give me Thomas Aquinas,” who believed that man needs divine help in the pursuit of knowledge. “Don’t give me Ayn Rand,” he says.

I’d be inclined to believe him if he started handing out copies of the Summa Theologica (in the original Latin, of course) to his aides and requiring them to read them as he did with Atlas Shrugs. But seriously, Aquinas? On the plus side, what he wrote is free today. (Here’s the Summa Theologica, considered his greatest work, in English.) I’ll be honest – I tried to stumble through the Summa Theologica in my youth, but with no success. That said, I don’t I’d pay to hear Ryan explain Aquinas’s work (provided it was a truthful and honest explanation) and how he plans to implement it to the American public. I’d especially love to hear him explain this to the banking community:

Consequently, just as it is a sin against justice, to take money, by tacit or express agreement, in return for lending money or anything else that is consumed by being used, so also is it a like sin, by tacit or express agreement to receive anything whose price can be measured by money. Yet there would be no sin in receiving something of the kind, not as exacting it, nor yet as though it were due on account of some agreement tacit or expressed, but as a gratuity: since, even before lending the money, one could accept a gratuity, nor is one in a worse condition through lending. On the other hand it is lawful to exact compensation for a loan, in respect of such things as are not appreciated by a measure of money, for instance, benevolence, and love for the lender, and so forth.

Of course, if Bank of America did start making loans simply out of benevolence or to encourage love for the lender, perhaps they’d make a lot fewer loans of the type that later require the benevolence of the Treasury and the Fed to bail them out.

Here’s more from the Summa Theologica

Things which are of human right cannot derogate from natural right or Divine right. Now according to the natural order established by Divine Providence, inferior things are ordained for the purpose of succoring man’s needs by their means. Wherefore the division and appropriation of things which are based on human law, do not preclude the fact that man’s needs have to be remedied by means of these very things. Hence whatever certain people have in superabundance is due, by natural law, to the purpose of succoring the poor. For this reason Ambrose [Loc. cit., 2, Objection 3] says, and his words are embodied in the Decretals (Dist. xlvii, can. Sicut ii): “It is the hungry man’s bread that you withhold, the naked man’s cloak that you store away, the money that you bury in the earth is the price of the poor man’s ransom and freedom.” Since, however, there are many who are in need, while it is impossible for all to be succored by means of the same thing, each one is entrusted with the stewardship of his own things, so that out of them he may come to the aid of those who are in need. Nevertheless, if the need be so manifest and urgent, that it is evident that the present need must be remedied by whatever means be at hand (for instance when a person is in some imminent danger, and there is no other possible remedy), then it is lawful for a man to succor his own need by means of another’s property, by taking it either openly or secretly: nor is this properly speaking theft or robbery.

Like I said, I’d love to hear Ryan explain this stuff to the American public. But somehow I don’t think this is what Ryan had in mind when he says “give me Thomas Aquinas.” I’d be willing to bet he read less of Aquinas than I did. Hat tips to both Paul Krugman and TBogg (great minds think alike?).

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