Tuesday, April 26, 2011

Who's Obsessed about the Birther issue?

Well I've sat here watching CNN do a segment on how the Birthers are obsessed with the issue of whether Obama was really born in the U.S. The segment has gone on for about 15 minutes now.

Does a Network that spends 15 minutes going on and on about an issue have any credibility accusing other people of being obsessed with the issue?

90 comments:

KyCobb said...

Martin,

The sad fact is that about half of likely GOP primary voters are birthers. Why do you think Trump keeps talking about it? Because its driving his approval numbers up with the GOP base.

Thomas said...

Well, over half of registered Republicans said in a poll in February that Obama was born outside the country. The lunatic fringe has become the lunatic mainstream apparently.

Singring said...

From an outsider's perspective, this birther nonsense is just another symptom of the Republican Presidential candidate race turning into a freakshow. When the most moderate and sane candidate you can muster is Rand Paul, you know you have a problem.

As much as I fundamentally disgree with conservatives on most issues in my own country, at least they spend their time advancing actual policy positions and present alternatives to the left on the issues.

In the US, it appears that all you have to do to rise to political prominence is shout as many lies as you can about as many non-issues as you can come up with to appeal to and furhter subtract from the lowest common denominator. Its a disgrace that race and religion are still the issue.

Even as a liberal/socialist, I really wish conservatives everywhere were as competent, as educated and as constructive in their positions as possible because only then can a productive dialogue on the issues be waged in which the right and the left can present their vision.

All that this hate mongering and spreading falsehoods by Trump, Bachman, Palin et al. does is drag everyone into the mud.

Oh...and on the topic:

I fully agree with Martin that TV 'journalism' in the US has become a joke - another consequence of corporate control. You don't air what's true or important, you air what gets ratings.

Of course with the Republicans doing everything they can to destroy the last vestiges of NPR, this will only get much, much worse in the future.

In Germany, the two major information/news networks are primarily funded by the government. Yes - the government. That's why we don't get people spending half an hour discussing whether Angela Merkel is a secret Communist on prime time television and instead get a dry, sober half hour report on why German industry is booming.

Lee said...

Were the 35% of registered Democrats who confessed to being "truthers" somehow less lunatic?

It seems to me that the notion that Obama was born in a foreign land is much more plausible than the notion that GWB helped mastermind 9/11.

Personally, my only concern is the Constitution. I'm glad Obama can (apparently) prove he was born in the U.S. This way, we avoid a constitutional crisis.

KyCobb said...

Lee,

How many Democratic presidential candidates pandered to trutherism in '04 or '08? While Trump has apparently been taking his talking points straight from the Moldovian Dentist/Realtor/Lawyer Orly Taitz, Palin, Gingrich, Huckabee and Bachmann have also all been dog whistling to racist birthers.

Lee said...

Okay, Ky, I thought I was keeping up on this thread, but you just lost me.

How does somebody conflate being a birther with racism?

KyCobb said...

Lee,

"Kenyan", particularly savage, white-killing, muslim Mau-Mau Kenyan, is dog whistle for "n*****". Sometimes they make it clearer, like when they photoshop the President as an African witchdoctor with a bone through his nose, or put his face on a chimpanzee.

Lee said...

Glad to hear you are so up to date on the code words for racism. Oddly enough, that sailed right past me.

So it's not that you don't think that someone can be a birther without being a racist?

And by the way, how did you feel about the depictions of Bush as a chimp?

One Brow said...

Martin,

So, when the mainstream media covers an obvious falsity that 46% of Republicans believe is true, and another 20%+ are unsure about, the mainstream media is the one obsessing? You would be happier if they ignored issues that over 2/3s of Republicans feel need to be addressed?

Somehow, I don't see you taking that position generally.

One Brow said...

Lee said...
And by the way, how did you feel about the depictions of Bush as a chimp?

You ever see a EuroAmerican called "monkey" or "jungle-bunny" as a term of derision? No false equivalences, please.

Lee said...

What if somebody had called Obama a chimp? Would that have been different?

Why is it worse to be disrespectful of someone's race than disrespectful in other ways?

KyCobb said...

Lee,

"So it's not that you don't think that someone can be a birther without being a racist?"

The point of birtherism is to label Obama as not one of us without actually calling him a n*****. I can't read what's in the heart of each individual birther.

"And by the way, how did you feel about the depictions of Bush as a chimp?"

To my knowledge, there is zero tradition of derogating whites as a race by comparing them to apes, while there is a long sordid history of explicit statements that african-americans are ape-like and therefore inferior. Comparing Bush to a chimp is a personal insult, and not racism.

Lee said...

> I can't read what's in the heart of each individual birther.

Really? Seems to me you're doing just fine.

Lee said...

> To my knowledge, there is zero tradition of derogating whites as a race by comparing them to apes, while there is a long sordid history of explicit statements that african-americans are ape-like and therefore inferior. Comparing Bush to a chimp is a personal insult, and not racism.

You don't think that calling Bush a chimp implied that he was inferior?

KyCobb said...

Lee,

"Why is it worse to be disrespectful of someone's race than disrespectful in other ways?"

Maybe a history of four centuries of oppression of countless millions of african-americans makes it worse than disrespecting a guy born with a silver spoon in his mouth.

KyCobb said...

Lee,

"You don't think that calling Bush a chimp implied that he was inferior?"

Of course it does, thats why I said it was a personal insult. It doesn't imply that whites as a race are inferior.

Lee said...

> Maybe a history of four centuries of oppression of countless millions of african-americans makes it worse than disrespecting a guy born with a silver spoon in his mouth.

So then, when liberals call Thomas Sowell an "Uncle Tom" because of his conservative views, they are really, deep down, expressing their racism?

KyCobb said...

Lee,

Got any examples of white liberals calling Sowell an "Uncle Tom"?

Lee said...

> Got any examples of white liberals calling Sowell an "Uncle Tom"?

"White liberals"? So a slur is dependent on who makes it?

I don't know of any prominent whites who called him that. And when you're poking around at Democratic Underground or Daily Kos and someone there does it, you can't necessarily tell if it's a white person doing it.

But sometimes you can.

I guess it helps when they post a picture.

http://wolfeboro.forumcab.com/viewtopic.php?t=1652&sid=7f11c77822517b473e8a3227b99a47a9

So, do you have any examples of Palin, Gingrich, Huckabee or Bachmann referring to Obama as a "savage, white-killing, muslim Mau-Mau Kenyan"?

Lee said...

Ted Rall called Condi Rice "Aunt Jemima". Does that mean Rall is a racist?

Lee said...

Wow. The things you find when you're built up the courage to lift the rock!

http://notmytribe.com/2009/suddenly-colored-television-86223.html

The fellow who wrote the article, Eric Verlo, is a white man if the photo wasn't faked. Don't know anything at all about the "Not My Tribe" web publication except that apparently they do reside on the left. I recognize Tom Hayden's name. Don't know the others.

I like this paragraph, the last sentence in particular:

> "Obama meanwhile is the black man we invite to dinner. And these colored teevee folk too. They’re not poor blacks after all. They’re the Thomas Sowells, Uncle Toms, educated reformed black people. Rich black people are the new lawn jockeys."

This adds another dimension to the discussion, I think. Is it even theoretically possible to say something about a black conservative that can be construed as racist? If it is possible, I would nominate this particular article.

KyCobb said...

Lee,

What Gingrich and Huckabee specifically said was that as a Kenyan, Obama was sympathetic to the anti-British Mau-Mau rebellion, tapping into ingrained white fear of threatening, savage blacks, and is also a complete lie since Obama was not raised in Kenya as Huckabee said, and there was no connection between Obama's family and the Mau-Maus.

I also have no problem saying that whites who derogate blacks as stereotypical "Uncle Toms" or "Aunt Jemimas" are engaging in racism. Using racial stereotypes is not a legitimate way to address issues.

KyCobb said...

Lee,

I should also add that Gingrich and Huckabee identified Obama's sympathy for the Mau-Maus as the root of his hatred for America, which of course is all invented.

Lee said...

> What Gingrich and Huckabee specifically said was that as a Kenyan, Obama was sympathetic to the anti-British Mau-Mau rebellion, tapping into ingrained white fear of threatening, savage blacks, and is also a complete lie since Obama was not raised in Kenya as Huckabee said, and there was no connection between Obama's family and the Mau-Maus.

I don't have the quotes or the links, so I can't evaluate the exact statement or its context. Is it possible that Obama was sympathetic to the Mau-Maus?

Apparently, you are wrong about there being no connection between Obama's family and the Mau-Maus, if this link is to be believed...

http://www.dailymail.co.uk/news/worldnews/article-1091499/Barack-Obamas-grandfather-tortured-British-Kenyas-Mau-Mau-rebellion.html

The lead paragraph states that Obama's grandfather was imprisoned and tortured by the Brits during the Mau-Mau war. The article mentions that Obama wrote of this incident in one of his books, but does not say what he said about it.

So, it would seem that there may be a concrete reason to suggest that Obama may have been sympathetic to Kenyan Mau-Maus. In fact, the point would seem to be tagging him as anti-colonialist or anti-imperialist, not so much as a dangerous black man.

Lee said...

> I also have no problem saying that whites who derogate blacks as stereotypical "Uncle Toms" or "Aunt Jemimas" are engaging in racism. Using racial stereotypes is not a legitimate way to address issues.

I concur. I also think that reflexively tarring the opposition as racist is not much better.

KyCobb said...

Lee,

" I also think that reflexively tarring the opposition as racist is not much better."

Its not reflexive. I don't automatically tar all opponents of the President as racist. The Birther movement, however, has obvious roots in racism, and there is no other good explanation for its persistence in the face of the facts. While the notion that the President was born in Kenya is totally fictitious, its a fact that John McCain was born in Panama, but you never heard anyone call him Panamanian, or suggest that he was anti-American because he was born in Panama.

Lee said...

> The Birther movement, however, has obvious roots in racism, and there is no other good explanation for its persistence in the face of the facts.

As much as I hate to disagree with you, Ky, it is not obvious to me how the birther, er, movement has roots in racism, let alone obvious ones. If Bill Clinton or Jimmy Carter had mostly lived overseas when they were young under analogous circumstances, I don't think the Right would have been any less likely to start their birther talk because they are white.

The "persistence in the face of facts" might have something to do with the fact that Obama has acted guilty as charged. It might also have something to do with some of the themes of his administration, e.g., bowing to other heads of state, decrying "American exceptionalism," and all in all acting as if he's not particularly proud of his country. Mistaken, "lunatic", whatever, it does not have to be racism.

Obama could have produced the birth certificate two years ago. I figured he was either hiding something (whether he was born overseas or something else), or sandbagging to embarrass the Republicans. Now, it looks like the latter. Hope he's had his fun. Now, a lot of people are suspicious who weren't suspicious two years ago.

My personal thoughts are that if he wasn't really born in the U.S., Hillary would have already found out and used it against him during the primaries. But that doesn't mean suspecting Obama of being foreign-born is all that much of a reach. It doesn't strike me as "lunatic." It seems pretty plausible that a lot of Americans were born overseas, and that some day one of them might want to be president, and might try to slip past the requirements phase. And maybe succeed. Certainly, that's not on the same order as believing GWB knew about the 9/11 bombings beforehand. To be a birther, one only needs to believe Obama was born overseas and is willing to lie about it. To be a truther, you have to believe a whole lot more incredible things about GWB.

Singring said...

'But that doesn't mean suspecting Obama of being foreign-born is all that much of a reach. It doesn't strike me as "lunatic."'

I'm sorry, Lee, but when the certificate of live birth has been produced, his birth was announced in two newspapers and eye-witnesses confrim his birth in Hawaii it is as lunatic to claim Obama was not born in teh US as it is to claim Bush orchestrated 9/11.

It is insane and the very fact that someone who professes to be interested in facts and truth as you are can make all of these paranoid excuses for this absurd nonsense is just another perfect illustration for why political discourse in the US has hit the sewers.

One Brow said...

Lee said...
Why is it worse to be disrespectful of someone's race than disrespectful in other ways?

For the same reason genocide is a more heinous crime than murder. It's an expression of hate to people as a group, temporarily focused on one individual, as opposed to hate owards an individual alone.

One Brow said...

Lee said...
So then, when liberals call Thomas Sowell an "Uncle Tom" because of his conservative views, they are really, deep down, expressing their racism?

Yes. Expecting a person to conform to a particular point of view because of his skin color is racism.

One Brow said...

KyCobb said...
I also have no problem saying that whites who derogate blacks as stereotypical "Uncle Toms" or "Aunt Jemimas" are engaging in racism. Using racial stereotypes is not a legitimate way to address issues.

I see no reason to restrict that to people of lighter skin. People of any skin color can be racist concerning any skin color, including their own.

One Brow said...

Lee said...
This adds another dimension to the discussion, I think. Is it even theoretically possible to say something about a black conservative that can be construed as racist? If it is possible, I would nominate this particular article.

It's kind of sad that you think th esubject of this article was black people.

One Brow said...

Lee said...
Obama could have produced the birth certificate two years ago.

Actually, he produced it three years ago.

Lee said...

> I'm sorry, Lee, but when the certificate of live birth has been produced, his birth was announced in two newspapers and eye-witnesses confrim his birth in Hawaii it is as lunatic to claim Obama was not born in teh US as it is to claim Bush orchestrated 9/11.

Welcome to the lunatic fringe, Singring.

Singring said...

'Welcome to the lunatic fringe, Singring.'

45 % of registered Republicans and about half of potential GOP candidates being birthers ain't the lunatic fringe, Lee.

Its the lunatic mainstream.

Lee said...

Fine, let's have a show of hands. A question directed at the lefties who frequent Martin's blog...

How many of you agree with the following statement by Singring?

> it is as lunatic to claim Obama was not born in teh US as it is to claim Bush orchestrated 9/11.

One Brow said...

Lee said...
How many of you agree with the following statement by Singring?

> it is as lunatic to claim Obama was not born in teh US as it is to claim Bush orchestrated 9/11.


I don't know is you can really compare "as lunatic", but I agree both notions are devoid of reality and evidence. I suspect they are equally lunatic notions, for many definiitons of "equally lunatic".

Our Founding Truth said...

Hasn't Obama illegally assumed the Presidency, as his dad was not a citizen? It's the same as an illegal coming across the border and having a son who becomes President. The 14th amendment says there is jurisdiction in becoming a citizen, thereby President. His dad came here legally, had Obama, but he wasn't a citizen. His parents have to both be citizens for Obama to be eligible.

Singring said...

Once again, OFT demonstrates why dogma can never be trumped. You just shift the goalposts.

Lee said...

Well, Singring, so far, one of our lefties has confessed to agreeing with you. So there are at least a couple of us in our little local lunatic fringe. A couple more, perhaps, you too can earn your way into the lunatic mainstream.

> I don't know is you can really compare "as lunatic", but I agree both notions are devoid of reality and evidence. I suspect they are equally lunatic notions, for many definitions of "equally lunatic".

I'll tell you why I disagree. First, we need to talk about how birthers and truthers are alike.

Both have to be willing to believe that politicians lie -- now, that isn't such a far stretch, is it? I never did think that Bush was the consummate liar that his enemies seethed over, but then again, I remember Richard Nixon. I know of at least one big bald-faced lie Bush told. And I also think Obama has earned his spurs in that regard -- to pick just one example, Gitmo is still in business. So, no points for lunacy there. Birthers and truthers alike quite plausibly believe their adversaries are willing to lie.

Both birthers and truthers must be willing to believe there is an effective conspiracy of silence and machination to believe what they do. A birther must believe that, at the very least, some Hawaiian bureaucrats are in on this, as well as key members of the Obama administration. Lunatic? I'd call it paranoid, for certain. Likewise, a truther would have to believe in a somewhat more vast conspiracy, since it is highly unlikely Bush could have had inside information about 9/11, let alone been the one to orchestrate it, without key members of his administration being on board, plus operatives of one or more intelligence agencies, not to mention al-Qaida keeping quiet about it all these years. I think that too is paranoid thinking, and I think the more vast the supposed conspiracy, the more in intense the paranoid affliction.

But here's the issue that separates birther from truther: the character issue. Both truthers and birthers must have a low opinion of their antagonists' character. But the worst thing a birther would have to impute to Obama is a willingness to lie and conspire -- and as we have pointed out, we award no bonus lunatic points to birthers on that score. A politician, willing to lie and conspire to get what he wants? How... unusual.

But a truther must believe, not just that Bush would be willing to lie and conspire -- I'd grant that in a heartbeat -- but that he's an evil monster of a human being who was at least to stand idly by while a foreign enemy incinerated thousands of American citizens, and perhaps even willing to plan it it and take part in it.

To believe Obama was born overseas, the worst I have to think about Obama is that he is willing to lie and conspire. But to believe Bush had advance knowledge of 9/11, I would have to believe he is evil and cruel; to believe he orchestrated it, I have to believe he is wicked to the core, a monumental, historical, appallingly demonic horror.

Now, I understand that Bush-hatred runs deep. But c'mon, There have been people in human history willing to commit such atrocities. For the record, I don't think either Bush or Obama is close to that level of wickedness. But it's the willingness to think such thoughts about one's political enemies that the sort of lunacy we're talking about is made of.

Lee said...

> But it's the willingness to think such thoughts about one's political enemies that the sort of lunacy we're talking about is made of.

Let me add... without evidence.

Singring said...

'But it's the willingness to think such thoughts about one's political enemies that the sort of lunacy we're talking about is made of.'

Lee, are you honestly trying to tell me that Tea Partiers who call Obama everything from a terrorist to the Antichrist think highly of their President? For crying out loud, even during the last Presidential race you had Palin accusing Obama of 'palling around with terrorists'.

Beck, Limbaugh, Hannity and their ilk constantly insinuated and sometime just flatly stated that Obama was out to destroy America. Remember when Beck did his whole little 'Obama, why don't you just set me on fire' spiel, or when he said he thought Obama was a racist?

The notion that Tea Partiers or Republicans for that matter don't think of Obama as any more evil than leftist zealots did of Bush is naive. Lunatically so, in fact.

One Brow said...

Our Founding Truth said...
Hasn't Obama illegally assumed the Presidency, as his dad was not a citizen? It's the same as an illegal coming across the border and having a son who becomes President.

Wrong. Just wrong.

The initial sentence of the Fourteenth Amendment:
Section 1. All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.

Nothing about the parent, at all. Unless you're born to the child of parents with diplomatic immunity, you are a citizen, period. In fact, the child of two illegal immigrants, as long as the *child* is born here, is eligible to be President.

Just let it go.

Lee said...

> Lee, are you honestly trying to tell me that Tea Partiers who call Obama everything from a terrorist to the Antichrist think highly of their President?

I have no doubt that there are Tea Partiers who believe that, even as I have no doubt that there are denizens of the left who believe the same about more or less anyone to the right of Ben Nelson.

But you're changing the subject. We're not talking about Tea Partiers. We are talking about birthers and truthers, and what you *have* to believe about your nemeses to belong to either camp.

Half of any discussion with you, Singring, is having to deal with all the chaff.

Singring said...

'But you're changing the subject. We're not talking about Tea Partiers. We are talking about birthers and truthers, and what you *have* to believe about your nemeses to belong to either camp.'

Show me one birther - just one - who does not believe that Barak Obama is either the Antichrist, a socialist who is willfully destroying America, a secret Muslim trying to take over America or simply evil - and I will gladly concede your point.

Lee said...

You could make a pretty strong case that he is a socialist who is at least trying to make America into a socialist country. From my perspective, that is tantamount to destroying America, but that's different than saying Obama is *trying* to destroy America. I think destruction could be the result of his policies, but I don't think *Obama* necessarily believes that.

Obama spent too much time listening to Rev. Wright's sermons ("God damn America") and rubbing elbows with Bill Ayers to make such a belief implausible.

Singring said...

'You could make a pretty strong case that he is a socialist who is at least trying to make America into a socialist country. '

This is hilarious. A socialist would have stood up to the Republicans on their tax breaks for the rich. A socialist wouldn't be touting that he is cutting taxes. A socialist would have gone into health reform pushing through a single-payer system using the Reconciliation process. A socilist would be cutting military spending.

Obama is at best a moderate conservative, at least by European standards. But of course the US has drifted so far to the right that he looks like a socialist.

'Obama spent too much time listening to Rev. Wright's sermons ("God damn America") and rubbing elbows with Bill Ayers to make such a belief implausible.'

So now you're saying its plausible that Obama actively wants to destroy America?

I think this proves my entire point rather nicely.

Lee said...
This comment has been removed by the author.
Lee said...

I think even Lenin would have had to change his approach had he been ushering socialism into the center-right U.S. instead of ripe-for-the-picking Czarist Russia. None of what you said shows Obama is not a socialist, only that he stops short of what you would like. If he does so for practical political reasons, then he could still be a socialist.

> So now you're saying its plausible that Obama actively wants to destroy America?

If Obama wanted to destroy America, my guess is, in addition to the damage he has done the U.S. economy, he would also have changed completely the Bush strategy in the war on terror. He hasn't done that. In fact, it's pretty much the Bush policy right down the line, including keeping Gitmo and letting the military try the terrorists.

So I cannot conclude that Obama is trying to destroy America -- only that, if he were trying to destroy America, he could hardly pick a better economic policy.

Singring said...

'None of what you said shows Obama is not a socialist, only that he stops short of what you would like.'

No. It shows that he has stopped short - well short in most cases, of what mainstream centre-left countries such as Germany, France, Sweden, Norway, Canada the UK and many others have adopted already, in some cases decades ago (countries which are trouncing the US in most if not all economic and scoial standards). The US is one of the last Western Countries to not have universal healthcare. And as bad as the gap between the rich and the poor is in Germany, for example, where the socialist government that is most likely to be voted in next election will raise taxes on the wealthy, it is nowhere near as bad as in the US, where the top 1 % owns more than the rest of the country combined and where Obama doesn't even have the guts to raise taxes on billionaires.

Obama is nowhere near as left as you think he is, which is precisely why the left wing of the Democratic party (i.e. Al Franken, Anthony Weiner, Dennis Kucinic and a handful of others) is disappointed with him.

You are welcome to dislike Obama as much as you like. But don't call him a socialist - its an insult to socialism.

'So I cannot conclude that Obama is trying to destroy America -- only that, if he were trying to destroy America, he could hardly pick a better economic policy.'

So I must assume George Bush and Ronald Reagan - under both of which the US experienced record increases in deficit - were also following an economic policy that was destroying America?

How about the Republicans who want to defund a healthcare program that is going to reduce the deficit within the next years? Are they pursuing an economic policy that is destroying America?

Lee said...

> The US is one of the last Western Countries to not have universal healthcare.

Yes, and we're skirting bankruptcy even without it. I guess we're just a bunch of overachievers here. Europe may prefer to become insolvent. There's no reason why we should.

> And as bad as the gap between the rich and the poor is in Germany... it is nowhere near as bad as in the US, where the top 1 % owns more than the rest of the country combined...

Well, boo hoo. As someone who is not in the top 1%, my personal sentiment is not that I begrudge them their wealth, but that I would like to join them in that economic strata some day. In America, there are more people who want to be rich than there are who want to punish the rich. Like I said, this is a center-right country, and Obama will play hell in the next election should he confine his moves to the Karl Marx playbook. He's a smart fellow. My guess is he knows this. Even socialists seem to want to be re-elected.

> You are welcome to dislike Obama as much as you like. But don't call him a socialist - its an insult to socialism.

I have no interest in insulting socialists; it's too hard to do, particularly since believing what they believe doesn't already seem to be shameful enough.

> So I must assume George Bush and Ronald Reagan - under both of which the US experienced record increases in deficit - were also following an economic policy that was destroying America?

I was never comfortable with the deficits of either president, but all of GWB's deficits combines were smaller than Obama's first year deficit, and we're continuing on at the new pace. There was no talk of our bond rating being devalued until we started hitting deficits in the trillions.

Much of this and future debt, I will grant, is due to the enormous entitlement programs that preceded Obama and are continuing onward. Republicans have either been too cowardly to fight these programs on principle (e.g., social security, medicare), or have been actively increasing them (GWB's medicare and medicaid increases). Democrats are dangerous, while Republicans, for the most part, with a rare exception or two, are mostly just worthless.

Singring said...

'Europe may prefer to become insolvent. There's no reason why we should.'

Those countries that are insolvent or close to it (e.g. Ireland) are so because of lacking oversight and taxation of the banking sector - not exactly problems linked with socialist policies.

'As someone who is not in the top 1%, my personal sentiment is not that I begrudge them their wealth, but that I would like to join them in that economic strata some day.'

So would I. But why should they not pay a lot more toward sustaining the society that has allowed them to become rich, especially when a lot of their wealth is not even contributing to society anymore?

Is taxing billionaires at 60 or 70 % instead of 25 % going to send them to the poor house? Get real...

'Like I said, this is a center-right country, and Obama will play hell in the next election should he confine his moves to the Karl Marx playbook.'

To claim that a president who has not yet raised taxes is taking his policies from the 'Karl Marx playbook' is so absurd, I don't even know how to respond to it.

'Republicans have either been too cowardly to fight these programs on principle (e.g., social security, medicare), or have been actively increasing them (GWB's medicare and medicaid increases).'

So when Republicans increase welfare problems they are worthless, when Democrats do it they are dangerous?

Got it.

'Republicans have either been too cowardly to fight these programs on principle (e.g., social security, medicare)...'

Would you end these programs?

Lee said...

> Those countries that are insolvent or close to it (e.g. Ireland) are so because of lacking oversight and taxation of the banking sector - not exactly problems linked with socialist policies.

I disagree. They are insolvent, and becoming more so, because everyone is sucking off the government teat and there aren't enough young'uns in the work force to support the big Ponzi game. Somebody has to actually produce the wealth that socialists are so eager to redistribute. One of the ways to ensure that no one does is to punish the rich.

> So would I. But why should they not pay a lot more toward sustaining the society that has allowed them to become rich, especially when a lot of their wealth is not even contributing to society anymore?

One way to ensure that their wealth will not contribute to society anymore is to punish the rich and make them shelter what they have.

> Is taxing billionaires at 60 or 70 % instead of 25 % going to send them to the poor house? Get real...

So that's the point? Take it from them as long as it doesn't hurt them? If that's the point, why don't you give me your check book now and I will start taking from you until it starts hurting you. And, of course, I will be the one to determine that.

There are a couple of problems with taking money from billionaires. The first one is, "60 or 70%" of what? Income? Here's some news you can use: to a billionaire, generating an income is an option, not a necessity. And that leads us directly into the second problem: billionaires will change their behavior once they figure out that you have your sights set on their wealth. They move their assets from taxable income to tax shelters.

And when you keep it up, they themselves move everything, including their own wealth, to another country that is more hospitable.

During the 1960s, the highest tax rate for the rich in England was 95% -- memorialized in song by the Beatles, "Taxman." "Let me tell you how it will be, there's one for you, nineteen for me." Also by the Kinks: "The taxman's taken all my dough and left me in this stately home, lazing on a sunny afternoon, and I can't sail my yacht, they've taken everything I've got..."

In John Lennon's last interview with Playboy a couple of months before his untimely death, he lost his cool when the interviewer asked him to justify being a socialist while having a net worth of $160 million. Of course he was still a socialist! How impertinent! The interviewer did not follow up by asking why he was living in New York City instead of London. John Lennon, the socialist, could have participated in British socialism all he wanted. He was rich. He had options. Take away 95%, and, why, he still had several million left over. What's the muss? What's the fuss?

But, oddly enough, John Lennon, the socialist, preferred living in a penthouse suite in New York City in capitalist United States than in the system he preferred for everyone other Brit.

Funny how that works.

> Would you end these programs?

Of course not. I would keep them all until they break the bank. The world will be better off without the U.S. anyway and it will end the horrifying condition of having so much wealth is concentrated here.

Sorry, there's a socialist ghost in my house and I was channeling him. These programs are unaffordable and they will end one way or another. What cannot go on, won't. Too bad, since I've been paying social security tax for forty years and I was just about to get some return on my "investment". But I'd rather be broke in a solvent U.S. than receiving promissory notes from a bankrupt Treasury in a bankrupt country.

Singring said...

'I disagree. They are insolvent, and becoming more so, because everyone is sucking off the government teat and there aren't enough young'uns in the work force to support the big Ponzi game. '

Have you ever read a newspaper? I lived in Ireland the past three years, so I experienced first hand what went down.

What happened in Ireland was thet the banks in Ireland - thanks largely to fewer regulations than on the mainland - were operating as high-risk investment firms for the rest of Europe and the US. Much of that investment was in real-estate. When the housing bubble burst, the banks went into a tailspin and politicians gave a blanket guarantee for theri loans - which cost the Irish taxpayer billions upon billions - more than any of the 'entitlement programs' put together!

It is now the private banks who are sucking on the public's teat - not the other way around, as you seemt to have concocted in your Randian delusions. Europe is sinking billions into Ireland to save private banks that imploded due to lax regulations - not to bail out healthcare or any other 'entitlement program'.

At leats get your facts straight.

'One way to ensure that their wealth will not contribute to society anymore is to punish the rich and make them shelter what they have.'

Tell me, Lee - how am I punishing someone who earns 10,000,000 a year on investements when I take 7,000,000 million away? Is he the poor guy going to go hungry on 3,000,000 a year?

'And, of course, I will be the one to determine that.'

The cost of living should be the basis upon which we decide taxation rates, as I have argued before. When the tax scheme results in one guy's net income being 2,000 times the cost of living each year while other guy - who works just as hard - earns the cost of living and no more, then that is not a just system and asking those who earn many times the cost of living has nothing to do with 'punishing' them, it has to do with balancing that inequality to some extent.

'Here's some news you can use: to a billionaire, generating an income is an option, not a necessity.'

So? If he stops generating income, we stop taxing him. But according to you, everyone is driven to generating income! So in fact taxiong billionaires more will increase the incentive to increase income because they will have to earn even more dollars than before to get the same net income!

'billionaires will change their behavior once they figure out that you have your sights set on their wealth.'

Again, I must ask you - if a billionaire who makes 10,000,000 a year ends up making 3,000,000 a year after taxes - is that not making him wealthier still?

'But, oddly enough, John Lennon, the socialist, preferred living in a penthouse suite in New York City in capitalist United States than in the system he preferred for everyone other Brit.'

Oddly enough, Paul McCartney and George Harrison stayed in the UK. How does that fit into your scenario?

How come there are billionaires in Germany, in France, in the UK today? How come German industry is booming if we are have their wealth in our sights? How come Bill Gates and Wrren Buffet are literally begging to haver their taxes increased?

'These programs are unaffordable and they will end one way or another. What cannot go on, won't.'

You're not asnwering the question. Would you end them today?

'Too bad, since I've been paying social security tax for forty years and I was just about to get some return on my "investment".'

You seem to be unaware that based on non-partisan estimates, social security is funded for another 20 or 30 years at least.

lee.dise said...

> It is now the private banks who are sucking on the public's teat - not the other way around, as you seemt to have concocted in your Randian delusions.

What I said was, "They are insolvent, and becoming more so, because everyone is sucking off the government teat...."

"Everyone" can and does include banks.

And I am not a Randist.

> How come Bill Gates and Wrren Buffet are literally begging to haver their taxes increased?

Because they can afford it. See previous post: income-generation for a billionaire is optional.

The interesting thing would be to be able to watch what they do with their personal assets when the rates do increase.

High tax rates hurt the wannabe rich more than they hurt the rich, because... you know the chorus, please sing along... generating an income when you're a billionaire is optional.

> You're not asnwering the question. Would you end them today?

You mean if someone died and made me an absolute monarch? I'd start phasing it out. But it's hard to unbreak the egg. It might be too late for us.

> You seem to be unaware that based on non-partisan estimates, social security is funded for another 20 or 30 years at least.

You seem to be unaware that nothing is being funded by anything. We're borrowing our money now.

Singring said...

'"Everyone" can and does include banks.'

So you acknowledge that is the private sector that was responsible for the problems in the Euro Zone, not 'entitlement programs'?

'And I am not a Randist.'

My apologies. Maybe the fact that you sound like one should give you pause for contemplation.

'Because they can afford it.'

Hold on, Lee. I'm getting dizzy from all your flip-flopping. One second billionaires are being 'punished' by high taxation, the next they 'can afford it'...if they can afford it and still live the comfortable life of an insanely rich person, how come its a 'punishment'???

'The interesting thing would be to be able to watch what they do with their personal assets when the rates do increase.'

I don't know...maybe continue their efforts in philanthropy as they are doing already? Or are you trying to suggest that they would move their assets out of the country despite having asked for tax increases in teh first place?

'You seem to be unaware that nothing is being funded by anything. We're borrowing our money now.'

You seem to be unaware that the same 'entitlement programs' were in place under Clinton, who had a budget SURPLUS - then Bush slashed taxes, passed unfunded legislation and started two undunded wars and - lo and behold - the deficit ballooned like never before.

So now lets do the basic math: Social security and Medicare --> surplus.
Social security, Medicare, low taxation, increases in military spending --> record deficit.

This does not at all support your hypothesis that medicare and social security are responsible for the deficit, but its a pretty good indication that something else is - namely low taxation and miliotary expenditures.

lee.dise said...

>> '"Everyone" can and does include banks.'

> So you acknowledge that is the private sector that was responsible for the problems in the Euro Zone, not 'entitlement programs'?

One of the reasons the free market works better than the business/government partnership known in some quarters as "corporate fascism" is that, in the free market system, businesses are allowed to fail. The banking crisis would have never happened without a number of conditions supplied by the government. Bailouts of the banks were one of these conditions. And (in the U.S.) you can't ignore the role of government in causing the housing bubble. The mortgage lenders were more or less forced by Congress to make mortgage loans to people who had (based on their income and net worth) no business buying houses.

Then, to top that off, the taxpayers were on the hook to bail out Fannie Mae and Freddie Mac due to all the bad loans. None of this could have happened without the degree of socialism that American banks were already, er, enjoying.

I don't know for certain to what degree Irish banks were invested in U.S. real estate bonds, nor what put the Irish banks under -- bad real estate investments is my understanding, whether they were American bonds or homemade over-valuation blunders. What I do know is, if the government had to bail them out, that is socialist intervention right there. It certainly isn't the free market. In the free market, banks that make bad loans go out of business.

As for Greece and Portugal, they are carrying too much debt for their modest economic growth rates to carry, and any solution is going to have to include reduction of the public sector. Spain, as I understand their situation, is addressing some of their exposure harm caused by government debt, by addressing the public unions and entitlement programs.

The problem, in a nutshell, is government spending, government debt, and government liability.

> My apologies. Maybe the fact that you sound like one should give you pause for contemplation.

I don't object to your confusing my economic views with Rand's. It's her religious and ethical views I despise. She was an atheist who believed that ethics are derived from Reason. That should sound familiar.

Lee said...

> Hold on, Lee. I'm getting dizzy from all your flip-flopping. One second billionaires are being 'punished' by high taxation, the next they 'can afford it'...if they can afford it and still live the comfortable life of an insanely rich person, how come its a 'punishment'???

My fault, since you used the term "billionaires" first and I did not draw the distinction when I should have between "the rich" and "billionaires." Please amend my former statements about billionaires to the generic "rich". There is rich, and then there is rich. Bill Gates and Warren Buffett are the richest of the rich.

What happens when a rich person's income is taxed at a higher rate than he's comfortable with is that he moves his money into shelters. But Bill Gates and Warren Buffett always get lots of fawning press coverage for supporting liberal positions. I don't know, maybe that's worth a few million to them. We would have to know just what these two do when it's just them, their money, and their tax lawyers and accountants, behind closed doors.

It is "punishment" though, any way you look at it -- at least it's financial punishment. Avoiding high taxes by moving your money into a shelter has costs, too, mostly in the form of foregone opportunity.

> Or are you trying to suggest that they would move their assets out of the country despite having asked for tax increases in teh first place?

With regard at least to Buffett, I don't have to guess. Buffett makes a lot of money off of at least one tax. It's a fascinating story. Every time the Republicans talk about repealing the inheritance tax, the liberal media trots Buffett out to proclaim how social justice demands we keep it. What they never report is how much money Buffett makes because of that tax.

Here's how the Buffett inheritance tax strategy works. Consider a hypothetical company named Mom & Pop Shop. Mom and Pop started the company back in the 1960s, and eventually built it into a sizable business, worth, say, $25 million. Last year, Mom and Pop died, leaving the Kids. The Kids got a bill for the inheritance tax, for about $10 million (don't know the actual rate, I think it's 35%). Now, the Kids may be rich, but they don't have that kind of cash sitting around; their wealth is tied up in the Shop. They're going to have to sell the Shop to pay the tax bill, even if they'd rather keep it (which they're uniquely situated to run well). And anything that has to be sold will get far less than true market value.

Buffett watches for just such a bargain. In he swoops with his checkbook. I'll make a deal you can't refuse, says Buffett: I'll buy your company and retain you Kids as management. He writes the Kids a big enough check that they feel like they've dodged a bullet, but Buffett got the bargain he was looking for -- he has bought a company at a fire-sale price, with solid financials, and management that understands the business.

Funny how that part of Buffett's strategy never makes it into those articles about his favoring the inheritance tax.

> then Bush slashed taxes, passed unfunded legislation and started two undunded wars and - lo and behold - the deficit ballooned like never before.

Sorry, the deficit didn't balloon until Obama.

Lee said...

> Sorry, the deficit didn't balloon until Obama.

...into the trillions, that is.

Lee said...

Here's an article that alludes to the Buffett inheritance tax strategy:

http://blog.heritage.org/?p=41433

> "Buffett’s support for the death tax is hardly altruistic. Dick Patten, executive director of the American Family Business Institute, writes: “In the process of building his company, Berkshire Hathaway, Mr. Buffett benefited tremendously from death tax. In fact, the tax is critical to two of the three legs that make up Mr. Buffett’s financial stool.”

Also, it should be pointed out that very little of Buffett's income is in the form of taxable income. He makes a paltry $100,000/year as CEO of Berkshire-Hathaway. His income arrives in the form of capital appreciation, and as long as he simply holds onto his investment, he pays only the capital-gains tax, which is about 17%. His employees pay a larger percentage in income taxes than he does.

Buffett has admitted as much and says it's a shame. But there is no reason why he can't pay more if he wants to. There is a line on the income tax form for voluntary donations. There is nothing stopping Buffett from writing in a large amount here every year.

Singring said...

'What happens when a rich person's income is taxed at a higher rate than he's comfortable with is that he moves his money into shelters.'

You keep making that claim, yet there is simply not data to back it up. As I said before, we have planty of millionaires and billionaires ambling about in Germany. In fact, I was just in Munich for the weekend and let me tell you that there are enough rich people there to get any Teap Party convention giddy.

But forget about anecdotes - lets look at an actual study that looked at millionaire migration from New Jersey, which has very high top tax rates compared to other states:

http://minnesota.publicradio.org/features/2011/02/documents/millionaire-migration.pdf

I quote:

'These findings mesh well with existing research showing that the migration response to marginal tax policy changes is generally quite small...We conclude that, at least in terms of the migration response to state income taxes, the rich are not different — they seem to have much the same non-response as the general population.'

So while it may be fun to ruminate about the panic-stricked rich fleeeing the evil government and its taxes, it simply isn't happening. Its a figment of right-wing imagination.

'Bailouts of the banks were one of these conditions.'

Could you please cite the law or regulation which stipulated that the government was obliged to bail out banks in the US or anywhere else?

Doesn't exist?

Aw shucks, then I guess we'll just have to look at what really happened: In the US, congress was asked to sign a two page bill - a TWO PAGE bill - giving carte blanche to Paulson for his bailouts. Paulson, who was a shill for the investment and banking sector.

In Ireland, ecexutives of AIB, the bank that started the mess in Ireland, met with prime minister Brian Cowen at night, two days before they were going to go into default. They basically told him and his staff that either he bail them out with a blank check or Ireland is going to go bankrupt. There were no other representatives present. The next day they passed emergency bailout legislation that gave unlimited protection. It later emerged that AIB had in fact lied to Cowen about their books, their reserves and their liabilities - all things that went unnoticed because the financial regulator was asleep at the wheel and lax regulations allowed thopse banks to get away with such things as giving unguaranteed loans to their own board members.

Meanwhile, in countries that had stricter banking regulations - Germany, France, the UK - these problems did not arise or arose to a much smaller degree.

Now if somehow you want to contort these plain facts into some scenario where you can blame 'the government' or 'scialism' for the banking crisis - be my guest. I guess there's simply no point in trying to argue with someone who wants to turn a correlation between lax regulationa nd crisis into a correlation between strict regulation and crisis.

Singring said...

'The mortgage lenders were more or less forced by Congress to make mortgage loans to people who had (based on their income and net worth) no business buying houses.'

What?!? Where do you come up with this stuff. Again, could you please give me any regulation, law or code which instructed banks to give loans to people who didn't have the necessary securities or income? It is patently absurd to claim that banks were 'forced' to do anything! It was the banks who were trying to push bad loans onto people because it would make them more cash!

Even in Germany, where we have stricter bank regulation and did not have as big of a crisis, a recent investigation by our regulatory body found that one in three - one in three - of cases, bank employees were giving customers inadequate, false or misleading information about theri prospective investments in councelling sessions.

Now you can imagibe what that situation was like in the US, for example, before the crisis.

But no - you go with your story of the evil government 'forcing' those poor, innocent banks to foist those loans onto bad people.

'Now, the Kids may be rich, but they don't have that kind of cash sitting around; their wealth is tied up in the Shop. They're going to have to sell the Shop to pay the tax bill, even if they'd rather keep it (which they're uniquely situated to run well). And anything that has to be sold will get far less than true market value.'

Funny thing, that. I looked at your Heritage Foundation article - and all it had to back up its claim was a blog entry on some far-right blog. Which in turn did not give one specific example - didn't even cite how much Buffett supposedly earned on this practice. Instead it did its best to pretend that life insurance - which actually is an investement that increases personal capital - is an evil scheme by the insurance industry to grab money off of people.

If you'll buy that I guess you'll buy anything. And I mean anything.

But even if thsoe artciles had a shred of truth about them (any your claim that the tax has to be paid in one lump sum, which I highly doubt) - so what? The kids sell the company for 15,000,000 and walk away with 5,000,000 unearned income! Its like a win in the lottery. Yet somehow, you claim that we evil 'death-tax' loving socialists are taking away their riches. Yeah - having 5,000,000 fall into your lap, that's a hard blow to take.

Singring said...

'> Sorry, the deficit didn't balloon until Obama.

...into the trillions, that is.'

Yeah - guess what Obama was handed: Two unfunded wars, an economic crisis and buckled to Republicans when it came to tax cuts.

As I laid out above, medicare and social security were in place under Clinton, who had a surplus - so how come you now blame those programs for the deficit when it is tax cuts and military spending that preceded the deficits?

You know, it would be really nice if at least soem of your points actually were supported by the evidence.

'His income arrives in the form of capital appreciation, and as long as he simply holds onto his investment, he pays only the capital-gains tax, which is about 17%. His employees pay a larger percentage in income taxes than he does.'

I'm glad to see you'Re starting to make my points for me! As a rich person, you don't have to work, you don't have to be productive, you just sit back and let your money multiply - plus you play insanely low taxes on your financial gains.Isn't it absurd that low-income employees (who put almost all of their remaining money directly back into the conomy) pay more taxes than someone who makes millions every year? Shouldn't it be the other way around?

'Buffett has admitted as much and says it's a shame. But there is no reason why he can't pay more if he wants to. There is a line on the income tax form for voluntary donations. There is nothing stopping Buffett from writing in a large amount here every year.'

True. In fact he has been donating much of his wealth to charity.

But what about those rich folks who don't do that? Are you honestly suggesting that any functioning society at all would exist if it all were based on charity? Truly?

Come on...

Lee said...

> So while it may be fun to ruminate about the panic-stricked rich fleeeing the evil government and its taxes, it simply isn't happening. Its a figment of right-wing imagination.

If is essential to your belief system to believe that rich people are stupid and got rich by being stupid.

When Kennedy, Reagan, and Clinton all signed into law reductions in capital-gains taxes, the result was increases in revenues. The lower rates brought out a lot of the capital that had been sitting on the fence at the higher rates.

If I have to quit quoting Heritage, you have to quit quoting Minnesota Public Radio.

> Could you please cite the law or regulation which stipulated that the government was obliged to bail out banks in the US or anywhere else?

Carefully worded, as usual. That's why the Federal Reserve Board exists. It's what the FDIC does. It's what Fannie Mae and Freddie Mac knew would be the bottom line if they overreached. "Obliged" to bail out banks? Maybe not. Empowered to do so? Most assuredly.

Singring said...
This comment has been removed by the author.
Singring said...

'If I have to quit quoting Heritage, you have to quit quoting Minnesota Public Radio.'

Apparently you didn't even take the time to click on the link because it directly goes to the pdf of the peer-reviewed study.

But hey - I get it. You read 'NPR' and your Tea-Party alarm-bells start a' ringing and you immediately think 'librul communist media!' and ignore it. Suddenly, it really starts to make sense to me how virtually every one of your points contradicts the actual data.

'Carefully worded, as usual. That's why the Federal Reserve Board exists. It's what the FDIC does. It's what Fannie Mae and Freddie Mac knew would be the bottom line if they overreached. "Obliged" to bail out banks? Maybe not. Empowered to do so? Most assuredly.'

So in other words you can't quote any regulation, law, directive or code - you just made that up. So now you change your story from the government 'forcing' lenders to do things and bailouts being 'conditions' of goverment regulation of banking to the government being 'empowered' to bail out banks.

Which means didley squat.

This has been fun, but I think its pretty obvious that the foundations of your narrative are about as reliable as a Clive Cussler novel and they keep shifting like the sands of the Sahara.

Singring said...

'When Kennedy, Reagan, and Clinton all signed into law reductions in capital-gains taxes, the result was increases in revenues. The lower rates brought out a lot of the capital that had been sitting on the fence at the higher rates.'

Again you veer wildly from side to side on the issue. Just a couple posts ago you were criticizing the fact that Buffett is paying such low capital gains tax!

And anyway...if you want to look at this graph:

http://usbudget.blogspot.com/2008/04/do-capital-gains-tax-cuts-raise-revenue_28.html

and read out of it that cuts in capital gains taxes lead to increased revenue, go right ahead. I will point to the period from 1991 to 1997 where capital gains revenue went up despite a flat tax rate, or 2000 to 2003 where capital gains tax revenues collapsed to illustarte that there are a lot of other factors that influence tax revenue that are much more important than the tax rate itself.

One Brow said...

Here's how the Buffett inheritance tax strategy works. Consider a hypothetical company named Mom & Pop Shop. Mom and Pop started the company back in the 1960s, and eventually built it into a sizable business, worth, say, $25 million. Last year, Mom and Pop died, leaving the Kids. The Kids got a bill for the inheritance tax, for about $10 million (don't know the actual rate, I think it's 35%). Now, the Kids may be rich, but they don't have that kind of cash sitting around; their wealth is tied up in the Shop.

So they take out a loan. The owners of a profitable business with a net worth of $25 million can easily afford a loan for $10 million. On the ohter hand, if the business is not profitable enough to support the loan, it's loss is not a big deal.

Not to mention the IRS does take payment plans on taxes all the time.

Lee said...

OneBrow, I submit that a $10 million loan (on a $25 million business) is a big deal. And that was a hypothetical example. I read about some real cases years ago, but don't have them available.

But the point is, here's this fellow who comes across like he's all for inheritance taxes for social reasons, when in fact he makes money on them.

I don't see anything wrong with taking advantage of the legal environment, only in the posturing.

Lee said...

Singring, I was an idiot to get into another discussion with you. I can't rectify that for the past, but only note that it won't happen again.

Singring said...

'I don't see anything wrong with taking advantage of the legal environment, only in the posturing.'

So then what was your whole Buffett rant meant to illustrate? That Buffett sometimes supports taxes that he himself profits from?

That he is asking for higher taxes on capital gains and income because he well somehow secretly profit from it?

Interesting...so please tell us from whence you get the idea that Buffett will benefit financially from increased taxes on his income.

Oh...and if you can actually tell us, you might want to attach how exactly that would support your idea that high taxes 'punish' the rich - because according to your as yet unrevealed hypothetcial scenario Buffet would be making MORE money at HIGHER tax rates.

Singring said...

'Singring, I was an idiot to get into another discussion with you. I can't rectify that for the past, but only note that it won't happen again.'

Always a pleasure.

One Brow said...

Lee said...
OneBrow, I submit that a $10 million loan (on a $25 million business) is a big deal.

While staying completely silent on the fact that payment plans do get offered, and aaty only 3% interest, to boot.

And that was a hypothetical example. I read about some real cases years ago, but don't have them available.

I'm sure you legitimately remember reading about real cases, but the real cases themselves did not exist.

But the point is, here's this fellow who comes across like he's all for inheritance taxes for social reasons, when in fact he makes money on them.

To say that is a fact would require evidence that he purchased at least one business solely because the owners could not pay the inheritence tax (as opposed to the owner not wixhing to run the business, which happens frequently).

Lee said...

There you go, OneBrow. It is not the original article I read, but it contains the examples you have demanded.

http://www.humanevents.com/article.php?id=15951

Money graf:

"Even as Mr. Buffett’s insurance companies are “protecting” family businesses from the IRS, he is buying companies that are forced to sell themselves to pay the death tax. Mr. Buffett’s ability to buy family businesses at bargain basement prices depends on families being desperate to sell—and nothing produces family businesses desperate to sell quickly like a 55% bill from the IRS on all of the businesses’ assets.

"Mr. Buffett has bought numerous companies who were forced to sell because of the death tax including: Dairy Queen, Jordan’s, Justin Industries, Star Furniture, Borsheim, Ben Bridge Jewelers, U.S. Liability, NetJets, R.C. Wiley, Flight Safety and Nebraska Furniture Mart."


> While staying completely silent on the fact that payment plans do get offered, and aaty only 3% interest, to boot.

Tell you what, OneBrow, I hereby present you with a bill for $10 million. Payable to me. Don't worry though. Money is cheap, and you can borrow it. Heck, I can even work out a payment schedule for you, if you need one.

A $10 million debt is only a problem for the people who have to pay it. You don't, because I don't have any marshalls at my disposal. And for those who don't and get to write policy, it's not a big deal at all.

Singring said...
This comment has been removed by the author.
Singring said...

Lee...prepare yourself for a shock.

'HUman Events' told you a lie. Yes, I know - its hard to believe that such a trusted, well-researched institution that checks its facts, checks them again and then goes back and checks them again would do that, but there you go.

Take a look at this article from the Orlando Sentinel (Oct. 1997):

http://articles.orlandosentinel.com/1997-10-22/business/9710211280_1_dairy-queen-berkshire-international-dairy

'Berkshire Hathaway Inc. said Tuesday it agreed to buy International Dairy Queen Inc. for $585 million, adding the venerable fast-food franchiser to its stable of holdings. Berkshire said it would pay $27 per share or $26 in its Class A or Class B common stock for each share of Minneapolis-based Dairy Queen, whose stock traded at $24, off 12.5 cents, on Nasdaq before it was halted for the announcement.'

Or look at this article:

'http://findarticles.com/p/articles/mi_m3190/is_n44_v31/ai_20040408/'

Now, first of all, what you will notice is that nowhere in these articles does it say that the family sold because of the estate tax. In fact, this article:

http://www.bizjournals.com/stlouis/stories/2006/09/11/story2.html

clearly states that the death of the owner had nothing to dow ith teh sale (whether you believe that is another matter, of course).

But now let's look at the stock price which was offered for Dairy Queen:

In teh first article, it says that Buffetts company offered 26 to 27 dollars per share, which was higher than the 24 dollars share price at the time. According to article 2, it was also just about equal to the highest stock price the share had reached in the year prior to the sale.

So if the family was desperate to sell the business to pay off the taxman - how come Buffet offered more than the current stock price at the time?

This is what the Human Events blog claims:

'Mr. Buffett’s ability to buy family businesses at bargain basement prices depends on families being desperate to sell—and nothing produces family businesses desperate to sell quickly like a 55% bill from the IRS on all of the businesses’ assets[...]These investments are the financial equivalent of a vulture scavenging a corpse.'

Now you tell me, Lee - is 27 bucks for a share being traded at 24 bucks a 'bargain basement' price? Is paying three bucks more than teh share price 'scavenging the corpse'???

I don't have the time to go through every one of the companies listed by that blog - but how much are you willing to bet me that we will not find any evidence of the estate tax being the cause for sale in most of those cases?

Lee said...

So here's the syllogism:

1. If the estate tax was a motivating factor for the sale, the newspaper article would have mentioned it.

2. The newspaper article didn't mention it.

3. Therefore, the estate tax was not a motivating factor.

Is that your argument?

Singring said...

'Is that your argument?'

Nope. My argument is very simple. There is simply no evidence that the estate tax played any part in teh sale of DQ and it is therefore a lie to claim there was as unambiguously as 'Human Events' did.

Let me quote them again:

'Mr. Buffett’s ability to buy family businesses at bargain basement prices depends on families being desperate to sell—and nothing produces family businesses desperate to sell quickly like a 55% bill from the IRS on all of the businesses’ assets[...]These investments are the financial equivalent of a vulture scavenging a corpse.'

They cite Dairy Queen as an explicit example of thsi practice.

So we look at what the parties involved said about the deal and they state that the death of the owner had nothing to do with the sale.

Then we look at the share price Buffett & Co offered for the takeover. It was higher than the trading price at the time and almost as high as the highest share price in the preceding year.

Now I know you're a smart guy, Lee.

So you tell me:

Do you see any evidence of Warren Buffett 'scavenging' off the corpse of Dairy Queen? Do you see any evidence of him buying up their company at 'bargain basement prices'? Do you see any evidence of the family being 'desperate' to sell the company?

Maybe you have some heretofore undisclosed evidence that supports those claims? Maybe you can ask your friends over at Human Events to dig it up?

Lee said...

> There is simply no evidence that the estate tax played any part in teh sale of DQ and it is therefore a lie to claim there was as unambiguously as 'Human Events' did.

And you conclude this from a survey of one newspaper article, which didn't contradict it, but only failed to mention it?

Singring said...

'And you conclude this from a survey of one newspaper article, which didn't contradict it, but only failed to mention it?'

No, I conclude this from two articles which I cited (two posts ago) in which no mention of the estate tax is made and one article in which this is expressly denied as a reason for the sale by both parties.

I also conclude this from the fact that the stock price offered by Buffett was higher than the trading price, which flatly contradicts the 'bargain basement', 'scavenger' and 'desperation' claims made by the blog.

I have argued all of this in detail above - twice, in fact - and have posted the links with the appropriate quotations. At least have the courtesy of reading my posts and the cited evidence (something you have now neglected twice) when debating with someone who actually makes the effort of fact-checking the artciles you link to.

Read the articles for yourself - as I said, the linksa re there for you to follow. Check the evidemnce for yourself. I have encouraged you to come up with some evidence that links the sale to the estate tax.

Lee said...

> No, I conclude this from two articles which I cited (two posts ago) in which no mention of the estate tax is made and one article in which this is expressly denied as a reason for the sale by both parties.

Could you reproduce that link? The one two or three posts back doesn't work for me.

> I also conclude this from the fact that the stock price offered by Buffett was higher than the trading price, which flatly contradicts the 'bargain basement', 'scavenger' and 'desperation' claims made by the blog.

Do buy-out prices normally reflect the trading price? Do you have some sort of expertise in this area?

Singring said...

Oops, sorry about that - I put the link in apostrophes which probably was why it didn't load properly:

http://findarticles.com/p/articles/mi_m3190/is_n44_v31/ai_20040408/

The Orlando Sentinel link is OK, I think, as is the third link from the St Louis Business Journal works for me as well.

'Do buy-out prices normally reflect the trading price? Do you have some sort of expertise in this area?'

I am not an Economist and I am not a trader, but I would say I have a basic understanding of basic market prices.

From all of the reports of takeovers that I have read or heard about in the past, it seems that prices that are much higher than the trading price are usually offered when a hostile takeover is attempted - this makes sense: you need a majority of the shares for a takeover, the current majority holder will obviously not want to sell his, so you have to bid a high price to entice the remaining stock holders to sell their shares to you. On the other hand, if stock holders are 'desperate' to sell their shares because they need to generate capital to pay off taxes or whatever, they will need to sell them fast and they will not necessarily be able to sell them all at the market price and will take a lower offer.

It works on basic market principles.

This apparently wasn't happening with the Dairy Queen takeover.

Now of course there are many other factorsd that yould play into this: For example the prospective development of the company. From the articles I take it that Dairy Queen was a growing and very healthy company - which would indicate that the prospects for the company were good. However, one article states that the highest share value for DQ was about 28 bucks in the year before the takeover, about four bucks more than when it happened. (Unfortunately I haven't been able to find a full record of DQ stock pricing). This would indicate to me that the stock price was fairly stable and there was little speculation, which would suggest that the company wasn't overvalued or undervalued and that the stock price was fairly accurate in terms of reflecting the worth of the company.

Now all of this adds up to suggest that this deal was quite fair and amicable. I certainly don't see how paying more than the trading price would qualify as a 'bargain basement price' and an indication of 'desperation' on the part of the sellers or of 'scavenging' on the part of Buffett. A scavenger might have said : I'll give you 20 bucks per share, take it or leave it. This obviously wasn't the case here.

Now I'll repeat: I'm not an economist or trader and I'm happy to be educated and corrected in this matter.

All I'm saying is that I can see no evidence whatsoever of the estate tax playing any role in this takeover, especially not in a fashion as dramatic and oppressive as the blog article makes out to be the case.

Singring said...

Lee, I have just found an article by someone who is apparently an economist who discusses precisely the article we are talking about and raises exactly the same objections I have raised:

http://www.fool.com/investing/general/2010/12/14/is-warren-buffett-a-grinch.aspx

I quote:

'Mind you, the article [the one at 'Human Events] didn't provide any detail around these supposed strongarm take-outs; it just provided a list.'

and

'Hours later, this Fool was able to find some evidence of estate tax issues in the deals for Star Furniture and Ben Bridge, but the assertion seems like much more of a stretch in many of the other cases. Justin Industries was a public company at the time of Berkshire's acquisition, as was Dairy Queen. The son-in-law of the R.C. Willey founder, and architect of much of the chain's pre-Berkshire success, recently collaborated on a book titled How to Build a Business Warren Buffett Would Buy: The R.C. Willey Story. Not exactly the kind of thing you'd expect to come from someone who was forced into a deal by the IRS.'

'So, in other words, no, Warren Buffett isn't using an advantageous position to force small, family-run companies to sell to him on the cheap.'

Now, this guy apparently is an ardent Buffett fan, so I would take all of this with a grain of salt - but since he does concede that there may have been estate tax issues in a couple of cases, he seems to come at the issue from a quite objective angle.

One Brow said...

Tell you what, OneBrow, I hereby present you with a bill for $10 million. Payable to me. Don't worry though. Money is cheap, and you can borrow it. Heck, I can even work out a payment schedule for you, if you need one.

What's the $25 million dollar business I'm getting along with the bill?

A $10 million debt is only a problem for the people who have to pay it.

What's the $25 million dollar business I'm getting along with the bill?

It's not a problem for people with a profitable $25 million dollar business to pay it, either.

Lee said...

Oh gosh, where to begin?

> Nope. My argument is very simple. There is simply no evidence that the estate tax played any part in teh sale of DQ and it is therefore a lie to claim there was as unambiguously as 'Human Events' did.

Well, a lot of people seem to think that the estate tax was a motivating factor. It does seem odd timing if it was not -- right before the fellow died? Also, admittedly, the DQ example wasn't a good match to my hypothetical example since it was a public company. But the incentive to sell the stock is still there with the estate taxes being what they are.

I can't prove DQ had to sell because of impending estate taxes.

Maybe this is a better example:

http://everythingwarrenbuffett.blogspot.com/2009/04/furniture-today-new-book-tells-rc.html

Money graf:

> "Bill couldn't accept the idea of turning over control of their family-run operation to bankers or competitors... But holding onto the business wasn't a good option either. It consisted of 1,000 shares of privately held stock, none of which had an assigned value. Bill held the majority of the shares... And Bill's children each held a limited number of shares... under the federal estate tax regulations the heirs would face a death tax of 55% of the assessed value of the business... An evaluation of $200 million would require a death tax well over $100 million. Then the remaining shareholders would have no choice but to sell the business, possibly at a fire-sale price.

"...But Buffett had a reputation for acquiring highly successful companies and taking a hands-off approach toward the management team and company philosophy. He also provided a great solution to the death tax by offering to pay for companies with shares of Berkshire Hathaway stock or cash. Since the Berkshire stock was registered with the New York Stock Exchange, Bill... would suddenly have an assigned value to their holdings and the transaction would enable their children to acquire shares of Berkshire stock. The inheritance problem would be resolved through an easy distribution."

Bear in mind that Buffett accomplished a good thing for the Willey estate. I don't deny that. Buffett received benefit by acquiring a good business. Willey received benefit by avoiding a $100 million estate tax bill. They were so proud of their deal, someone wrote a book about it.

But it does support my view that Buffett exploits the estate tax for personal gain. And that, when liberals trot him out as a proponent of the estate tax, the mainstream news media should mention that he makes money off of the estate tax.

In more ways than one, in fact. If you're going to avoid paying estate taxes, you have a couple of options. Give it to charity -- that's what Buffett is going to do. Put it in a trust, which defers the problem. Or buy life insurance to cover the estate tax. It should be pointed out that Buffett's Berkshire-Hathaway owns six insurance companies.

> 'So, in other words, no, Warren Buffett isn't using an advantageous position to force small, family-run companies to sell to him on the cheap.'

I would phrase it differently: he is using the reality of the inheritance tax to force family-run businesses into his corner of the ring. It is not essential to my argument that Buffett ("Bwah hah hah!") ruins his prey; I will settle for the more modest claim that he profits off of the inheritance tax that he touts as socially just. So I will take back my previous reference to Buffett getting a "fire-sale" price (although it is generally understood that when something has to sell, it commands less).

Singring said...

'I can't prove DQ had to sell because of impending estate taxes.'

That is not the point, Lee. The point is that you cited a blog article that made some very strong claims about the estate tax and Buffett's business practice but then on closer inspection did not back those claims up.

That should make you very weary of their claims not only in this case, but in general. Instead, you leap to the next example.

I just hope that in future you will do a better job of critically evaluating your source of information.

As to your Willey story: Yes, I agree that the estate tax was one motivating factor for the sale in thsi case. But look at this paragraph just preceding the one you cite:

'It had been a great ride. But Bill was getting older and wanted to retire soon. Sheldon was ready for a change, too. They were at a point in their lives when selling the company made some sense.

Yet Bill kept saying no to every offer that came along. Money wasn't the issue; $200 million was an unimaginable sum. Rather, what had kept Bill from saying yes to an offer was his concern for the store's legacy.'

They were ready to sell even before the tax issue came up, they just didn't want to sell to any old investor who came along.

You admit that Buffett did a decent thing in this instance. I agree. I don't see exactly how he was profiteering in this case if once again he paid a fair price for the company. This is the issue: The estate tax did not 'destroy' teh family', it did not help Buffet 'scavenge their corpse', it simply was a case where the estate tax was the final decisive factor that led to a fair sale of the business.

Buffett has bought many other businesses that were not motivated by the estate tax. If he was exclusively 'praying' on such companies, you might have a point, but clearly he isn't.

By your logic, you would have to be up in arms against politicians who vote for tax cuts because those tax cuts benefit the very same politicians. Yet somehow I never hear you rail against Paul Ryan or Boehner when the call for lower taxes on the wealthy. How come?

'I will take back my previous reference to Buffett getting a "fire-sale" price (although it is generally understood that when something has to sell, it commands less).'

That seems very reasonable. I agree that Buffett in some cases buys companies in part, or mainly, because these want to sell because of the estate tax. I also agree that Buffett makes money off his life insurance companies. But it just strikes me as unreasonable to claim that Buffett is somehow being hypocritical when wanting the estate tax to stay in place - after all, it is why he is going to give his money to charity, rather than leave it as inheritance and secondly, I just don't see a consistency between the claim that on the one hand, he wants the estate tax to stay in place because of his personal gain, but then is asking for higher income and capital gains taxes. If he were out to maximise his own benefit, he would be against that.

Lee said...

I've still been researching the Buffett-Estate Tax-Money connection, and found some interesting stuff, mostly from the "puff" pieces about Buffett scattered here and there on the Internet.

I have no idea who Robert Miles is, but he wrote this:

http://www.robertpmiles.com/BuffettSchool.htm

...and he gushed this:

> "Estate taxes drove Melvyn Wolff and his sister, Shirley Toomim, into the Buffett fold. The sole owners of Houston-based Star Furniture realized that when they met their maker, their business “would have to be sold under the hammer to justify the tax,” Wolff explains. “We cared deeply about the employees and had to do something...”

> ...the investment adviser turned to Wolff wih a last-minute solution. “There is one stone we may have left unturned,” he told him. “Warren Buffett. He pays a fair price for companies and lets management run them. He’s already in the furniture business, so it’s not something he has to learn.”... The acquisition took place in 1997."

Starting to look like a pattern yet? I'm sure Star Furniture's owners were grateful for Buffett's help against the estate tax. No word about how grateful they are about Buffett's advocacy of it.

But not all articles on Buffett are puff pieces, witness John Berlau's article, "Buffetted", in the Aug 23, 2004 National Review (the article I remembered reading but couldn't recall earlier).

Berlau: "...Buffett reaps a windfall because of the destructive impact the estate tax has on family businesses. Through Berkshire-Hathaway, Buffett acquires profitable family businesses that are sold to him in large part because the businesses cannot meet the estate-tax burden, while at the same time selling estate-tax-insurance products to help other families hang on to their businesses. (Berkshire Hathaway's corporate headquarters in Omaha did not return phone calls asking for comment.)"

Example: "Take his acquisition of the [Buffalo News] in the 1970s.... according to a just-published history of the Buffalo News -- the paper would never have gone up for sale had it not been for the estate tax."

And now we're back to Dairy Queen. Berlau: "Fast-forward to the 1990s: Buffett has his eye on the fast-food chain Dairy Queen. He goes to the board of International Dairy Queen Inc., makes an offer and is rebuffed. Then a strange sort of luck comes Buffett's way: In 1997, Rudy Luther, a Minnesota auto dealer who owns 15 percent of the company stock, dies. His children need to sell the stock to pay off estate taxes, Luther's son tells the Minneapolis Star Tribune. Fearful that the sale of such a high volume of shares could massively drive down the stock price, the Dairy Queen board approaches Buffett to buy the Luther family's shares. All or nothing, Buffett says, according to the Star Tribune's account. So the board foregoes a bidding process and agrees to Buffett's price. The deal is eventually approved by a majority of shareholders, though not without at least one lawsuit and several protests from shareholders and fund managers who feel the shares are worth more."

Other examples in the article: Willey (again), Ben Bridge Jeweler.

Lee said...

Now for the questions and comments:

> That is not the point, Lee. The point is that you cited a blog article that made some very strong claims about the estate tax and Buffett's business practice but then on closer inspection did not back those claims up.

Do I have to exceed the standards you set for yourself, Singring, or just meet them? Here's another strong and unbacked-up statement:

> 'HUman Events' told you a lie.

It appears that Human Events was telling the truth -- at least there is corroborative testimony -- even if their presentation was far from complete. But you somehow concluded they had lied. I would say they built a poor case. There's a difference.

> [Willey] were ready to sell even before the tax issue came up, they just didn't want to sell to any old investor who came along.

The question here is whether the sale to Buffett would have taken place without that $100 million Sword of Estate Tax hanging over their heads, and whether its influence over the Willeys aided Buffett in his acquisition. As you admit, it was at least one motivating factor. Fine, we're making progress.

> You admit that Buffett did a decent thing in this instance. I agree.

Helping the company avoid a confiscatory estate tax is, in my opinion, a decent and honorable thing. Publicly advocating for the estate tax, posing as a man of the people, all the while taking advantage of others through its use, is not.

> I don't see exactly how he was profiteering in this case if once again he paid a fair price for the company.

As in the case of Dairy Queen (Berlau's account), he used the estate tax to motivate an all-or-nothing deal. It forces people to sell to him who, without the estate tax as a motivator, would not necessarily be inclined to sell. In Berlau's discussion of the Bridge Jeweler acquisition, Herb Bridge was initially angry about having to sell. He later changed his mind and embraced the Buffett logic on why we should have estate taxes, but the point is, at the time of the sale, Buffett acquired the business at the price he wanted because of that tax.

So of course Buffett is profiteering here. He's taking advantage of the estate tax to motivate the sellers. No, he probably doesn't get "fire sale" prices, but he certainly does better than having to make a cold offer without that motivating factor in his corner.

But I don't have a problem with the profiteering. I have a problem with the tax and the hypocrisy.

Lee said...

> But it just strikes me as unreasonable to claim that Buffett is somehow being hypocritical when wanting the estate tax to stay in place - after all, it is why he is going to give his money to charity, rather than leave it as inheritance...

And note, please, that as much as Buffett expresses admiration for the estate tax, he has things set up so that none will be paid on his fortune. It's a tax he admires, but has no intention of paying.

> ...and secondly, I just don't see a consistency between the claim that on the one hand, he wants the estate tax to stay in place because of his personal gain, but then is asking for higher income and capital gains taxes.

I don't claim to know how Buffett feels about income or capital gains taxes. Has he been asking to increase them? Perhaps, perhaps not. Maybe you know. At present writing, I don't.

But one thing that being super-rich does is give you options. Buffett gets to choose how much income tax he will pay. As I pointed out earlier, Buffett can advocate higher income taxes all he wants, secure in the knowledge that he need pay very little. His official salary at Berkshire Hathaway is a mere token, $100 thousand a year. His wealth accumulation takes the form of stock appreciation, and for that he only has to pay the modest capital-gains tax on any stock that he lets ride. For any stock that he does cash out on, he would have to pay income taxes.

I used to live in Omaha and I have seen his house -- it's a very nice house, but not the sort of house you expect a multi-billionaire to live in. By most accounts, Buffett lives (relatively) modestly, and I'm sure expense accounts handle a lot of his living expenses (and should, since he's probably traveling all the time). In short, Buffett doesn't need to generate much of an income to get by, and seems happy to let most of his wealth accumulation ride in his stocks.

Also, I don't know how much of a charge Buffett gets for all the wonderful puff pieces written about him. If they're a motivating factor, the psychological gain may well be worth the cost, to him. I think I can predict how a group of rich men will react to particular hikes in tax rates, but not necessarily any one man. Who knows what's going through his head?

All I know is that he could be paying a lot more in taxes than he does, but has things structured so that he doesn't pay any more than he has to pay now while he's alive, and won't in death. And he gets good press for advocating a tax he'll never pay.

Singring said...

That's some impressibe research you've done there, Lee. It seems to back up Human Event's claims to some degree, though I still see no evidence of 'bargain basement' prices or 'corpse scavenging'. Buffett simply used the opportunity to buy businesses at a fair price and kept the management in place.

I'll concede that you may call that 'profiteering'. And I concede how you could call Buffett's endoresement of the estate tax hypocritical. What I still don't see is how that a) impinges on taxation in general, b) shows that the estate tax is bad or c) shows that Buffett is a bad guy. If he was buying these businesses and then broike them up, that would be another matter - but all of them are still going strong, apparently.

'...he has things set up so that none will be paid on his fortune. It's a tax he admires, but has no intention of paying.'

So? The point is that his money will not be going to his heirs, it will be going to charity - a good cause. That is one of the intended outcomes of estate taxation - instead of a family staying rich for no other reason that the great-great-grandfather was rich, the moeny goes to benefit others as well.

What I find ironic is that its the libertarians/capitalists who constantly harp about 'everyone having to fend for themselves' and 'its up to the individual to take care of themselves' get upset about a tax that helps to achieve exactly that: a rich kid will have to do a little more work to be as rich as his dad.

As to Buffett's general statements on taxes:

'“If anything, taxes for the lower and middle class and maybe even the upper middle class should even probably be cut further,” Buffett said in an interview with ABC’s “This Week With Christiane Amanpour” that is scheduled to air on Nov. 28. “But I think that people at the high end -- people like myself -- should be paying a lot more in taxes. We have it better than we’ve ever had it.” '

from:
http://www.bloomberg.com/news/2010-11-21/warren-buffett-tells-abc-rich-people-should-pay-more-in-taxes.html

and

'Buffett cited himself, the third-richest person in the world, as an example. Last year, Buffett said, he was taxed at 17.7 percent on his taxable income of more than $46 million. His receptionist was taxed at about 30 percent.

Buffett said that was despite the fact that he was not trying to avoid paying higher taxes. "I don't have a tax shelter," he said. And he challenged Congress and his audience to see what the people who "clean our offices" are taxed, to loud applause. '

from

http://www.washingtonpost.com/wp-dyn/content/article/2007/06/27/AR2007062700097.html