Senator John Kerry votes with his feet to avoid Massachusetts taxes

So Kerry apparently does understand that taxes do alter behavior.

Sen. John Kerry, who has repeatedly voted to raise taxes while in Congress, dodged a whopping six-figure state tax bill on his new multimillion-dollar yacht by mooring her in Newport, R.I.

Isabel - Kerry’s luxe, 76-foot New Zealand-built Friendship sloop with an Edwardian-style, glossy varnished teak interior, two VIP main cabins and a pilothouse fitted with a wet bar and cold wine storage - was designed by Rhode Island boat designer Ted Fontaine.

But instead of berthing the vessel in Nantucket, where the senator summers with the missus, Teresa Heinz, Isabel’s hailing port is listed as “Newport” on her stern.

Could the reason be that the Ocean State repealed its Boat Sales and Use Tax back in 1993, making the tiny state to the south a haven - like the Cayman Islands, Bermuda and Nassau - for tax-skirting luxury yacht owners?

Cash-strapped Massachusetts still collects a 6.25 percent sales tax and an annual excise tax on yachts. Sources say Isabel sold for something in the neighborhood of $7 million, meaning Kerry saved approximately $437,500 in sales tax and an annual excise tax of about $70,000.

The senior senator’s chief of staff David Wade denied the old salt was berthing his boat out of state to avoid ponying up to the commonwealth. . . .

"White House predicts record $1.47 trillion deficit"

Next year's deficit is supposed to be $1.42 trillion, but I bet that it will be higher than that because the static assumptions made for the coming tax increases.

New estimates from the White House on Friday predict the budget deficit will reach a record $1.47 trillion this year. The government is borrowing 41 cents of every dollar it spends.
That's actually a little better than the administration predicted in February.
The new estimates paint a grim unemployment picture as the economy experiences a relatively jobless recovery. The unemployment rate, presently averaging 9.5 percent, would average 9 percent next year under the new estimates.
The Office of Management and Budget report has ominous news for President Barack Obama should he seek re-election in 2012 — a still-high unemployment rate of 8.1 percent. That would be well above normal, which is closer to a rate of 5.5 percent to 6 percent. Private economists don't think the unemployment rate will drop to those levels until well into this decade.
The gaping deficits are of increasing concern to voters. But Obama and Democrats controlling Congress are mostly taking a pass on deficit reduction this year as they await possible recommendations from Obama's deficit commission.
While there's a slight improvement in the deficit for the current year, next year's predicted $1.42 trillion worth of red ink — that's 37 cents of borrowing for every dollar spent — is looking worse. It's about $150 billion more than previously predicted, because of still-slumping tax revenues. . . .

Some of the 400 who participated in Journolist

From NPR to the Washington Post to Politico, there are a lot of well-known names here. The sources for these names is here. I haven't double checked all the names.

1. Ezra Klein - Washington Post, Newsweek, The American Prospect
2. Dave Weigel - Washington Post, MSNBC, The Washington Independent
3. Matthew Yglesias – Center for American Progress, The Atlantic Monthly
4. David Dayen - FireDogLake
5. Spencer Ackerman – Wired, FireDogLake, Washington Independent, Talking Points Memo, The American Prospect
6. Jeffrey Toobin – CNN, The New Yorker
7. Eric Alterman – The Nation, Media Matters for America
8. Paul Krugman – The New York Times, Princeton University
9. John Judis – The New Republic, The American Prospect
10. Eve Fairbanks – The New Republic
11. Mike Allen - POLITICO
12. Ben Smith - POLITICO
13. Lisa Lerer - POLITICO
14. Joe Klein - TIME
15. Brad DeLong – The Economists’ Voice, University of California at Berkley
16. Chris Hayes – The Nation
17. Matt Duss – Center for American Progress
18. Jonathan Chait – The New Republic
19. Jesse Singal – The Boston Globe, Washington Monthly
20. Michael Cohen – New America Foundation
21. Isaac Chotiner – The New Republic
22. Katha Pollitt – The Nation
23. Alyssa Rosenberg – Washingtonian, The Atlantic, Government Executive
24. Rick Perlstein – Author, Campaign for America’s Future
25. Alex Rossmiller – National Security Network
26. Ed Kilgore – Democratic Stategist
27. Walter Shapiro – PoliticsDaily.com
28. Noam Scheiber – The New Republic
29. Michael Tomasky – The Guardian
30. Rich Yeselson – Change to Win
31. Tim Fernholz – American Prospect
32. Dana Goldstein – The Daily Beast
33. Jonathan Cohn – The New Republic
34. Scott Winship – Pew Economic Mobility Project
35. David Roberts - Grist
36. Luke Mitchell – Harper’s Magazine
37. John Blevins – South Texas College of Law
38. Moira Whelan – National Security Network
39. Henry Farrell – George Washington University
40. Josh Bearman – LA Weekly
41. Alec McGillis – Washington Post
42. Greg Anrig – The Century Foundation
43. Adele Stan – The Media Consortium
44. Steven Teles – Yale University
45. Harold Pollack – University of Chicago
46. Adam Serwer – American Prospect
47. Ryan Donmoyer - Bloomberg
48. Seth Michaels – MyDD.com
49. Kate Steadman – Kaiser Health News
50. Michael Scherer - TIME
51. Laura Rozen – Politico, Mother Jones
52. Jesse Taylor – Pandagon.net
53. Michael Hirsh - Newsweek
54. Daniel Davies – The Guardian
55. Jonathan Zasloff – UCLA
56. Richard Kim – The Nation
57. Thomas Schaller – Baltimore Sun
58. Jared Bernstein – Economic Policy Institute
59. Holly Yeager – Columbia Journalism Review
60. Joe Conason – The New York Observer
61. David Greenberg - Slate
62. Todd Gitlin – Columbia University
63. Mark Schmitt – American Prospect
64. Kevin Drum – Washington Monthly
65. Sarah Spitz – NPR
66. Jonathan Stein – Mother Jones
67. Daniel Levy – Century Foundation
68. Ben Adler – Newsweek, POLITICO
69. Avi Zenilman – POLITICO
70. Suzanne Nossel – Human Rights Watch
71. Nick Baumann – Mother Jones
72. Ryan Avent – Economist
72. Greg Sargent – Washington Post
73. Gautham Nagesh – The Hill, Daily Caller
74. Foster Kamer – The Village Voice
75. David Corn – Mother Jones

Race and sex of owners played role in what GM dealerships were shutdown

Well, this is pretty disturbing from the TARP Special Inspector General Neal M. Barofsky. The race and sex of the dealership owner apparently factored into determining whether dealerships would be closed down. First some background. GM and Chrysler were forced by the government to close 2,000 dealerships and putting 100,000 people out of their jobs during a recession. Now it turns out that these closing probably didn't save the car companies any money and it may have even cost them money (p. 30, from the "Factors Affecting the Decisions of General Motors and Chrysler to Reduce their Dealership Networks," July 10, 2010, Office of the Special Inspector General for the Troubled Asset Relief Program).

In fact, when asked by SIGTARP what GM will save by closing any particular dealership, one GM official stated the answer is usually “not one damn cent.”

Furthermore, a GM official stated that removing a dealership from the network does not save money for GM—it might even cost GM money—and that savings cannot be attributed or assigned to any one dealership. According to one GM official, it was a “math exercise” to assign a savings amount to one dealership; it was difficult to estimate savings for a particular dealership because the savings are expected to be achieved when the entire dealership network plan is accomplished.

The report concluded (pp. 28-29, see also pages 11-12):

One, although there was broad consensus that GM and Chrysler generally needed to decrease the number of their dealerships, there was disagreement over where, and how quickly, the cuts should have been made. Some experts that SIGTARP spoke to in connection with this audit questioned whether it was appropriate to apply the foreign model to the U.S. automakers, particularly in small markets in which the U.S. companies currently have a competitive advantage, a concern apparently not substantially considered by the Auto Team when they adopted this theory. The conclusion that the manufacturers should close dealerships more rapidly than originally planned was also criticized as being potentially counterproductive; one expert opined, for example, that closing dealerships in an environment already disrupted by the recession could result in an even greater crisis in sales.

So how did GM determine who to shutdown? (pp. 17-18)

GM determined that dealerships with a DPS Score of 100 were average performers; those below 70 were considered poor performers and would not be retained. SIGTARP noted, however, that GM did not uniformly apply the phase one criteria to the entire network. For example, our analysis found that two of the wind-down dealers did not meet either criterion. Furthermore, we found that, of the dealerships that met only one of the two criteria:
• GM retained 355 (or approximately 41 percent) of the 858 dealerships that had a DPS score below 70.16
• GM retained 9 of the 394 dealerships that sold fewer than 50 new vehicles in 2008.17
GM officials attributed these inconsistencies primarily to a desire to maintain coverage in certain rural areas where they have a competitive advantage over import auto companies that are not typically located in rural areas, although ultimately close to half of all of the GM dealerships identified for termination were in rural areas. Other dealerships were retained because they were recently appointed, were key wholesale parts dealers, or were minority- or woman-owned dealerships.

More than half of the GM dealerships that were identified to be closed were in rural areas (p. 24). Yet, as noted above, this were probably not the best places to shutdown dealerships.

Note that last year that the Obama administration denied that dealerships were being closed based on the political affiliation of the owner.

The White House denied Thursday charges by conservative bloggers that President Obama's Auto Task Force, which is overseeing the restructuring of the U.S. auto industry, targeted for closure Chrysler dealers who have contributed to Republicans.

"We don't make those decisions. Ok?," said White House Press Secretary Robert Gibbs. "Chrysler makes those decisions. So I am sure you can send Chrysler the address of the blog that you refer to. ... We're not involved in making those decisions I would think your question would be appropriately dealt with by the company that is." . . .

I said last year that I didn't believe that there was evidence to support this claim.

John R. Lott, the professor best known for his books, "More guns, less crime: The bias against gun rights" and "Freedomnomics," called earlier this week to talk about the possibility of partisan political considerations in the Obama administration's closing of nearly 800 Chrysler dealerships.
"I just don't see the evidence for partisanship," said Lott, who is a senior research scientist at the University of Maryland. He's prevously held professorships at the Wharton School, University of Chicago and Yale. When this guy has an opinion about an issue that is subject to data-driven analysis, I listen. . . .

Shop owner with gun thwarts theft ring

An incident from Tacoma, Washington:

Brian Herbert believes a credit card theft ring targeted him and nearly got away Wednesday with at least $15,000 in jewelry and other items ordered over the Internet.

Herbert, owner of Last Stop Computers in Tacoma, wasn’t about to let that happen.

With Herbert’s help and that of his two sons, Tacoma police arrested a 23-year-old California woman who allegedly used Herbert’s credit card to order the jewelry and other items.

Herbert said he didn’t know his card was being abused until the bank called Tuesday, alerting him to the $15,000-plus in charges with a woman’s name attached. The bank told him approval for the purchases had been declined, but that turned out to be wrong. . . .

“You are going to jail,” Herbert said he told the woman.

She denied doing anything wrong and got back into the limo, Herbert said. He stood in front of the limo and called police. The limo driver also called police and said a man who appeared to have a gun pointed at him wouldn’t let him drive away. . . .

"Morgan freeman solves the race problem"

Campaign finance regulations move forward in Senate

This bill still disadvantages corporations relative to unions, but not as badly as the House bill. That said, when things go to conference Republicans have to worry that Democrats will put in whatever they want.

Sen. Charles Schumer has introduced a new version of a controversial campaign-finance reform bill opposed by Republicans and special-interest groups, and hopes to force a vote on the measure as early as next week.

Schumer, chairman of the Rules and Administration Committee – which has jurisdiction over campaign-finance issues – dropped the new bill Wednesday night.

The New York Democrat, aware that Minority Leader Mitch McConnell (R-Ky.) and other GOP leaders will move to block it, will try to bring the measure to the Senate floor without first marking it up in committee. He is seeking a cloture vote on the legislation before the Senate recesses for the August break, possibly by next week, according to a Senate aide.

Schumer’s revised version of the DISCLOSE (Democracy Is Strengthened by Casting Light on Spending in Elections) Act differs in several ways from the version passed by the House in June.

The bill would require corporations, unions and advocacy groups to reveal their roles in political ads or mailings in the closing months of a campaign. Companies that receive TARP funding and smaller government contractors are also barred from underwriting “electioneering communications.” . . .

The measure is vehemently opposed by the U.S. Chamber of Commerce and other special-interest groups that see it as an attempt to muzzle their involvement in the political process.

But Democrats believe the legislation is necessary to prevent corporations and advocacy groups from dumping tens of millions of dollars into federal races without having to acknowledge their role in such activities.

Schumer has left intact a contentious provision exempting the National Rifle Association and several other large organizations from the reporting requirements of the legislation. But he has removed other language that had been backed by the AFL-CIO and other unions excusing the labor organizations from having to report money transfers between affiliates. . . .

Dems to renew Bush's Middle Class Tax Cuts for $2 trillion

It is great that the taxes will remain lower for middle income tax payers, but it is bad that the tax system will become even more progressive. From Time Magazine:

Just when you thought Congress was spent -- literally -- and done for the year they'll turn around and surprise you. No money left to do anything? United Republican opposition? Democrats are planning to take on the great white whale of spending: extending President Bush's middle class tax cuts. The cost is estimated from $1.6 trillion to extend them to as much as $2.7 trillion to make them permanent. According to Senate Democratic sources, the latter is what they're going to go for -- and they're planning to do it before the midterm elections. . . .

Two more sex scandal allegations against Gore

Given the National Enquirer got John Edwards, there might be some credibility give to this:

The ENQUIRER reports in an exclusive bombshell exclusive that police have investigated charges from TWO MORE WOMEN who claimed they were abused by former VP AL GORE!

The allegations come hot on the heels of an ongoing Portland, Ore., police investigation that reopened after The ENQUIRER exclusively revealed accusations by a licensed massage therapist who says Gore groped her in 2006.

The ENQUIRER recently uncovered shocking allegations, from two other massage therapists.

The first incident allegedly took place at a Beverly Hills luxury hotel when Gore, 62, was in Hollywood to attend the Oscars in 2007.

The second reportedly occurred a year later at a hotel in Tokyo. . . .

Congress ranks last in Institutions that people have confidence in

PRINCETON, NJ -- Gallup's 2010 Confidence in Institutions poll finds Congress ranking dead last out of the 16 institutions rated this year. Eleven percent of Americans say they have a great deal or quite a lot of confidence in Congress, down from 17% in 2009 and a percentage point lower than the previous low for Congress, recorded in 2008. . . .

Gallup had congress almost as low in 2008, but Democrats who controlled Congress then still picked up seats. My guess is which party gets the blame actually depends on who controls the presidency.

Political decisions clearly infect Obama's electronic health records

HIV apparently isn't an important health issue. Going to the doctor for the flu will be in your records but not HIV infections. Why shouldn't information on HIV or abortions be counted? Why are those the exceptions?

Dr. David Blumenthal, the Obama administration's National Coordinator for Health Information Technology, said on Tuesday that patients can choose to omit procedures such as abortions and positive HIV tests from the electronic health records (EHR) that every American is supposed to have by 2014 under the terms of the economic stimulus law that President Barack Obama signed last year.

Blumenthal's office, a subdivision of the Department of Health and Human Services, was created by the stimulus law specifically to generate the standards and regulations that will govern the federally mandated use of EHRs. . . .

"Journolist 2.0"

Well, Journolist, which has been getting so much attention with journalists discussing how to pitch the news so has help Obama and Democrats, didn't really go away. They just changed their name and narrowed down the list of invited journalists from 400 to 170. The new name is: "Cabalist."

The list was created by The New Republic's Jon Cohn, Michelle Goldberg (no relation) and Steven Teles.

I spoke with Jon Cohn this morning from his secret underground headquarters and I asked him if the members of Cabalist understood that their private listserv was not, in fact, private (although, unaccountably, Cabalist has managed to stay secret for several weeks, until this historic Goldblog moment you are now experiencing).
"Personally," Jon said, "I am of the view that things are going to get out from time to time. I wouldn't do it, but clearly stuff gets out."

Others on the original Journolist, such as Joe Klein of Time, defend the chat room and what was discussed.

Today, the Daily Caller has printed one of my Journolist emails, in which I share my latest published thinking about the just-announced Republican vice presidential candidate and thank the group--in an ironic, overblown tone--for the conversation we'd been having on the subject. When seen through the lens of witless right-wing conspiracy mongering, this seems embarrassing. But there was no conspiracy afoot. I didn't need the folks on Journolist to figure out how to react to Sarah Palin: her lack of qualifications for the vice presidency--and her spectacular abilities as a stand-up politician--represented a fecund gusher of material that made even the most mediocre of columnists seem like geniuses. Writing about Palin was not hard work; it still isn't; it will never be. . . .

But here is what his discussion contained:

Joe Klein of Time stopped by with an update on the latest from his magazine: “We’re reporting that she actually supported the bridge to nowhere. First flub?”

Klein, who displayed an independent streak in other circumstances (“anybody who knows me knows I do my own thinking,” he said in a Wednesday interview), seemed to exude more partisanship that day than usual.

As the morning wore on into the afternoon, some on Journolist came to believe the Palin pick had been shrewd. Palin was coming off as appealing and a maverick, they worried.

“Okay, let’s get deadly serious, folks. Grating voice or not, ‘inexperienced’ or not, Sarah Palin’s just been introduced to the country as a brave, above-party, oil-company-bashing, pork-hating maverick ‘outsider’,” Kilgore said, “What we can do is to expose her ideology.”

Ryan Avent, then blogging for the Economist and now an editor there, agreed that criticizing Palin’s experience might not work. “I really don’t think the experience argument needs to be made by the Dems. It’s completely obvious to any reasonable person. Instead, hammer away at the fact that she has terrible positions on things like choice, and on the fact that she has no ideas on the issues important to people,” he wrote.

Journolist’s founder Ezra Klein, now a blogger at the Washington Post, reached an entirely different conclusion: “I see no reason to attack Palin. I think you accurately describe Palin and attack McCain.” Klein linked to an article he had written for the American Prospect that calmly described Palin’s thin resume. . . .

What the "major" television news broadcasts have left out

Report on the UN Arms Trade Treaty

The Second Amendment Foundation has this report:

The Following is an up to the minute report from Julianne Versnel, Director of Operations
for the Second Amendment Foundation who is representing SAF as an NGO delegate at the United Nations ATT meeting.

The Arms Trade Treaty Prep Committee began on July 12, 2010 and will conclude on July 23, 2010. Ambassador Roberto Garcia Moritan of Argentina is the Chair. On Friday, July 19, Non-Governmental Organization (NGO) representatives were told that the majority of the meetings would be closed to them. The critical discussions on the scope of the treaty will have no input from any non-governmental entity. Scope is critical in the Arms Trade Treaty process. In North America, some Pan Asian Countries and in some other parts of the world, the arms that we expect to have covered in this treaty are nuclear weapons. In much of Europe and most all of Africa, the delegates anticipate that the ATT will cover rifles, shotguns, handguns and ammunition as well.

There appears little doubt that some sort of treaty will be adopted by 2014, if not by 2012. It is anticipated that the final treaty will attempt to register all firearms, require micro-stamping, destruction of surplus ammunition on a very set schedule, registration of all firearms and restriction on any transfer of arms including between private individuals and many other restrictions. If the United States is a signatory and this is ratified by the U.S. Senate, this UN treaty would be the law. On October 30, 2009, UN members voted in favor of an ATT. The United States voted in favor of an ATT.

The UN has an aggressive schedule of meetings planned to push for these restrictions and we will be there representing you in every way we can. We will be at the CTOP/COP meeting in Vienna the week of October 18 and a General Assembly meeting at the end of October. In January, the five permanent members of the Security Council will meet and this is on the agenda. There will be another ATT Preparatory meeting at the end of February in New York. The regional UNIDIR meeting sponsored by the EU will start in March. We will come full circle with the Programme of Action Experts Meeting in May 2011 and the July 17-21 ATT Preparatory meeting that is expected to offer the final draft to the treaty.

A police officer comments on Chicago's gun control laws

Dave Smith at Policeone.com has some thoughtful comments on Chicago's gun control laws here.

Empirical Evidence, the Second Amendment, and the Courts

I often talk to lawyers who bring gun rights cases and there is one bone of contention. They frequently shy away from mentioning any empirical evidence, saying that legal cases on guns should just involve what the constitution says. I am sympathetic and undoubtedly in a perfect world when the Bill of Rights says "Congress shall pass no law" or "shall not be infringed" those points seem pretty clear. But facts make a difference for a couple reasons. 1) At the simplest level, Justices or judges won't make rulings that they think will end up hurting people. If they think that gun ownership will harm people, they will rule restrictively. 2) The courts over time have adopted balancing tests of different levels. The First Amendment is read by the courts as really saying "Congress shall pass no law unless they have a good reason." How good of a reason depends on the level of "scrutiny" that the court requires.

Take the Oral arguments in the Heller case, a case where the court's majority decision explicitly did not point to empirical evidence on the gunlock part of their decision. Yet, they did want to know some empirical answers:

CHIEF JUSTICE ROBERTS: So how long does it take? If your interpretation is correct, how long does it take to remove the trigger lock and make the gun operable. . . .

JUSTICE SCALIA: You turn on, you turn on the lamp next to your bed so you can -- you can turn the knob at 3-22-95, and so somebody -- . . .

CHIEF JUSTICE ROBERTS: So then you turn on the lamp, you pick up your reading glasses --

CHIEF JUSTICE ROBERTS: . . . I'd like some idea about how long it takes.

Justice Alito also had questions on this. Possibly they weren't interested in this for themselves, but they felt that there was some Justice or Justices for which the answer to these questions mattered. It is a mistake to continue ignoring these empirical issues. We lucked out in the Heller decision on gunlocks, but don't expect that to always be the case.

Unnoticed tax in the Government Health Care Bill

These things happen when you are dealing with legislation (plus the correction bill) that are almost 3,000 pages. This legislation was incredibly complicated, and, for all those congressman who claimed that they actually read this bill, there are lots of provisions that they should be asked to defend this fall in the campaigns.

Starting Jan. 1, 2012, Form 1099s will become a means of reporting to the Internal Revenue Service the purchases of all goods and services by small businesses and self-employed people that exceed $600 during a calendar year. Precious metals such as coins and bullion fall into this category and coin dealers have been among those most rankled by the change. . . .

Taking an early and vociferous role in opposing the measure is the precious metal and coin industry, according to Diane Piret, industry affairs director for the Industry Council for Tangible Assets. The ICTA, based in Severna Park, Md., is a trade association representing an estimated 5,000 coin and bullion dealers in the United States.

"Coin dealers not only buy for their inventory from other dealers, but also with great frequency from the public," Piret said. "Most other types of businesses will have a limited number of suppliers from which they buy their goods and products for resale."

So every time a member of the public sells more than $600 worth of gold to a dealer, Piret said, the transaction will have to be reported to the government by the buyer.


Pat Heller, who owns Liberty Coin Service in Lansing, Mich., deals with around 1,000 customers every week. Many are individuals looking to protect wealth in an uncertain economy, he said, while others are dealers like him.

With spot market prices for gold at nearly $1,200 an ounce, Heller estimates that he'll be filling out between 10,000 and 20,000 tax forms per year after the new law takes effect.

"I'll have to hire two full-time people just to track all this stuff, which cuts into my profitability," he said. . . .

The ICTA's Piret says identity theft is another concern because criminals may set up shops specifically to extract personal information that would accompany the filing out of a 1099.

The office of the National Taxpayer Advocate, a citizen's ombudsman within the IRS, issued a report June 30 that said the new rule "may present significant administrative challenges to taxpayers and the IRS."

Dems pushing for Comparable worth law

Great now we might be having the government set people's pay.

On Tuesday, Vice President Joe Biden challenged male senators opposed to the Paycheck Fairness Act to “step up” and vote for it — or explain their opposition to “women you say you care about.”

“It is an issue [on which] you’re going to have to look into the eyes of your granddaughters and ... the young women you have hired ... and say, ‘You know, when it came time, I didn’t step up,’” Biden said at a Middle Class Task Force event at the White House. “I really mean it. Because I can tell you, some of the guys who voted against Title IX, they had to look at their daughters and granddaughters and answer that question.”

Biden spoke at a White House event designed to boost support for the legislation, which would guarantee that men and women are paid the same wages for the same jobs. Members of the White House Council on Women and Girls joined Biden’s call to end “pay discrimination.”

“Women make up nearly half of all workers on U.S. payrolls, and two-thirds of families with children are headed either by two working parents or by a single parent who works,” Biden said. “Closing the gender pay gap, helping parents keep their jobs while balancing family responsibilities and increasing workplace flexibility — these are not only women’s issues; they are issues of middle-class economic security.” . . .

As Maggie Thatcher said: "The problem with socialism is that eventually you run out of other people's money"

Total US debt is increasing by much more than the deficit.

Total US govt financial system support seen at $3.7 trln

* US support swells by $700 bln in past year-watchdog

* Mortgage, housing commitments account for most of rise

* TARP watchdog criticizes Obama housing rescue efforts

By David Lawder

WASHINGTON, July 21 (Reuters) - Increased housing commitments swelled U.S. taxpayers' total support for the financial system by $700 billion in the past year to around $3.7 trillion, a government watchdog said on Wednesday.

The Special Inspector General for the Troubled Asset Relief Program said the increase was due largely to the government's pledges to supply capital to Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) and to guarantee more mortgages to the support the housing market.

Increased guarantees for loans backed by the Federal Housing Administration, the Government National Mortgage Association and the Veterans administration increased the government's commitments by $512.4 billion alone in the year to June 30, according to the report.

"Indeed, the current outstanding balance of overall Federal support for the nation's financial system...has actually increased more than 23% over the past year, from approximately $3.0 trillion to $3.7 trillion -- the equivalent of a fully deployed TARP program -- largely without congressional action, even as the banking crisis has, by most measures, abated from its most acute phases," the TARP inspector general, Neil Barofsky, wrote in the report.

The total includes Federal Reserve programs and a myriad of asset guarantees, including Federal Deposit Insurance Corp. protection for bank deposits. . . .

Meanwhile the housing market is continuing to collapse: Construction Slows, Inventories Build Amid Weak Job Growth, Tax-Credit End.

On Tuesday, the U.S. Census Bureau said single-family housing starts in June fell by 0.7%, to a seasonally adjusted annual rate of 454,000. The U.S. started 1.47 million homes in 2006, before the housing bubble popped.

Future construction looks even weaker. Permits for single-family starts fell 3% in June, following big declines in both May and April. "We're hovering at post-World War II lows," said Ivy Zelman, president of Zelman & Associates, a research firm. . . .

CNN could use some balance

This clip about the Tea Party is simply too bizarre. They keep on talking about all the evidence that Tea Party members are racist with nothing that really amounts to evidence. This segment has two extreme left wingers and no one to balance them off. Only at the very end of the clip when the host points out that "there are African-American members of the Tea Party," one of the guest says: "Well, sure there were Jewish Concentration Camp guards weren't there."


At the very beginning of the clip shown above they were referring to a blog post put up by someone named Mark Williams (from another segment on CNN): "Mark Williams, posted a satirical blog that in part reads, 'Freedom means having to work for real, think for ourselves, and take consequences along with rewards. That is just far too much to ask of us colored people and we demand that it stop.'" So what did the Tea Party do with Mark Williams for using the term "colored people"? The New York Daily News reports that he "was kicked out of the National Tea Party Federation Saturday for a racist blog post." It would seem that there were few people in the Tea Party who agreed with William's views.

Presentation at the Heritage Foundation: The Consequences of McDonald v.Chicago: Will the Sky Fall or Do More Guns Mean Less Crime?

New piece up at Fox News: Our Unemployment Insurance Addiction

My newest piece starts this way:

The extension of unemployment insurance benefits is expected to pass the Senate today. Despite President Obama's attack on Republicans for delaying the bill, it could easily have passed a month ago if Democrats hadn't added so many other unrelated radical measures to it -- from higher taxes to changes in the Medicare reimbursement formula.

The bill President Obama has been hammering Republicans over in the last couple of days has been puzzling since he already knew that he had enough Republican votes to overcome any filibuster and pass the extended benefits.

The problem, though, isn't that there is insufficient Republican support to pass it. The problem is that the bill will ultimately increase long term unemployment and it will reduce our GDP.

Ironically, if some of Obama's attacks are correct, Republicans can only be accused of trying to help Obama's presidency.

Suppose, as the president said on Monday, that Republicans really believe "that emergency relief somehow discourages people from looking for a job." If that were true, those Republicans who are opposing the added extension of benefits would believe that defeating it would lower the unemployment rate. . . .

Journalists plot how to mold media stories to help Obama

Journolist's history of media manipulation goes further. The Daily Caller has the discussion here. Liberal journalists calling for shutting down Fox News.

For those who have read the third edition of More Guns, Less Crime

For those who have read the third edition of More Guns, Less Crime, I would appreciate it if you would consider putting up reviews of the book at Amazon.com or Barnes and Noble.com.

A note to those who missed when I announced the release of the book, but the third edition of More Guns, Less Crime was released at the end of May. It has about 200 pages of new material over what was in the 2nd edition (2000) and about 300 pages of new material over what was in the first edition (1998). A lot has happened during the last 10 years (for example, the sunsetting of the assault weapons ban, gun bans in DC and Chicago being struck down, etc.), and I hope that people find this new work interesting and helpful.

Thank you very much.

Gun sales increase in Chicago area?

ABC News seems to think that there are signs of it occurring.

After a Supreme Court decision affirming the right to bear arms was handed down in June, the owners of Midwest Sporting Goods, just outside of Chicago, started noticed something any retailer would find encouraging – an increasing number of customers.

With Chicago's 28-year ban on handgun ownership rendered unconstitutional, more people were coming into Midwest, in Lyons, Illinois, to exercise their Second Amendment rights, according to Noel, the store's owner. He asked that his last name not be published.

Lock and Load
"It's not like sales suddenly went through the roof," he said. "There are still restrictions and waiting periods. But we are anticipating a major increase in sales going forward. It's not going to happen overnight, but it's going to happen." . . .

Presentation tomorrow at the Heritage Foundation

I will be giving a presentation tomorrow at 12:30 at the Heritage Foundation on McDonald v. Chicago and its aftermath. This is from the announcement for the event.

Just days ago, the Supreme Court issued its landmark ruling in McDonald v. Chicago, holding that individual citizens have constitutional gun rights – not just against the federal government – but also against local governments, and striking down Chicago’s almost complete ban on handguns in the home. Several big city mayors are squawking that the sky will fall and violence will reign supreme. What are the legal and practical consequences of this decision?
In its decisions this year and in 2008, the Court ruled that the Second Amendment protects individual gun rights of all Americans, but how broad are those rights? Even if most gun bans are unconstitutional, some regulations are permissible. Which ones? Just as important, what are the practical implications of more law-abiding citizens keeping guns? In McDonald, the High Court noted that gun murders increased after Chicago banned guns. Do more guns mean less crime, as John Lott argues in the third edition of his influential book? The Supreme Court has just begun to grapple with the meaning of the Second Amendment, but our panelists will have many more answers regarding both the legal and practical ramifications of the Court’s decision.

Military uses laser to shoot down drone

A discussion on the story is here.

Even a couple of years ago, who would have believed that we would be about to confirm a Supreme Court Justice who believed in banning books?

Here are some arguments that Elena Kagan approved of as the Solicitor General. Here are the arguments she approved of in March 29, 2009:

CHIEF JUSTICE ROBERTS: If it has one name, one use of the candidate's name, it would be covered, correct?
MR. STEWART: That's correct.
CHIEF JUSTICE ROBERTS: It's a 500-page book, and at the end it says, and so vote for X, the government could ban that?
MR. STEWART: Well, if it says vote for X, it would be express advocacy and it would be covered by the pre-existing Federal Election Campaign Act provision.
CHIEF JUSTICE ROBERTS: No, I'm talking about under the Constitution, what we've been discussing,
if it's a book. MR. STEWART: If it's a book and it is again, to leave -- to leave to one side the Official - Subject to Final Review produced -- question of.
CHIEF JUSTICE ROBERTS: Right, right. Forget the --
MR. STEWART: -- possible media exemption, if you had Citizens United or General Motors using general treasury funds to publish a book that said at the outset, for instance, Hillary Clinton's election would be a disaster for this --
CHIEF JUSTICE ROBERTS: Take my hypothetical. It doesn't say at the outset. It funds -- here is -- whatever it is, this is a discussion of the American political system, and at the end it says vote for X.
MR. STEWART: Yes, our position would be that the corporation could be required to use PAC funds rather than general treasury funds.
CHIEF JUSTICE ROBERTS: And if they didn't, you could ban it?
MR. STEWART: If they didn't, we could prohibit the publication of the book using the corporate treasury funds.

Ted Olson summarized the Obama administration's argument in the second oral arguments on the case on September 9, 2009.

THEODORE B. OLSON: The government admits that that radical concept of requiring public support for the speech before you can speak would even authorize it to criminalize books and signs. . . .

Here are the revised arguments that Kagan herself made where she backed away from the argument on books and argued that the current law only applied to short books (pamphlets) on September 9, 2009:

CHIEF JUSTICE ROBERTS: But we don't put our -- we don't put our First Amendment rights in the hands of FEC bureaucrats; and if you say that you are not going to apply it to a book, what about a pamphlet?
GENERAL KAGAN: I think a -- a pamphlet would be different. A pamphlet is pretty classic electioneering, so there is no attempt to say that 441 b only applies to video and not to print. . . .

Why is a US Senator Writing to a company to tell them how to address concerns about their products

Is there anything that politicians don't think that they are supposed to tell companies what to do? In this case, Senator Charlie Schumer wrote Apple Computer about how to deal with their iPhone 4 reception questions. Schumer might have wished that he waited until after Steve Job's press conference on Friday (see here for video).

Do politicians realize what is appropriate given that their actions might come across as threats?

July 15, 2010
Dear Mr. Jobs,
I write to express concern regarding the reception problem with the Apple iPhone 4. While I commend Apple's innovative approach to mobile technology and appreciate its service to millions of iPhone users nationwide, I believe it is incumbent upon Apple to address this flaw in a transparent manner. According to Consumer Reports' review, released Monday on its Web site, the iPhone 4's signal-strength problem is a hardwire glitch triggered by gripping the device in a particular manner. This finding, according to Consumer Reports, "call[s] into question" Apple's recent claim that the problem is "largely an optical illusion caused by faulty software." Consumer Reports declined to recommend the iPhone 4 because of this hardware design flaw.
Given the discrepancy between Consumer Reports' explanation of the reception problem and the explanation provided by Apple in its July 2 letter to customers, I am concerned that the nearly 2 million purchasers of the iPhone 4 may not have complete information about the quality of the product they have purchased. The burden for consumers caused by this glitch, combined with the confusion over its cause and how it will be fixed, has the potential to undermine the many benefits of this innovative device. To address this concern, I ask that Apple provide iPhone 4 customers with a clearly written explanation of the cause of the reception problem and make a public commitment to remedy it free-of-charge. The solutions offered to date by Apple for dealing with the so-called "death grip" malfunction--such as holding the device differently, or buying a cover for it--seem to be insufficient. These proposed solutions would unfairly place the burden on consumers for resolving a problem they were not aware of when they purchased their phones.
I also encourage Apple to keep its promise to provide free software updates so that bars displayed accurately reflect signal strength; I further urge Apple to issue a written explanation of the formula it uses to calculate bar strength, so that consumers can once again trust the product that they have invested in.
I look forward to Apple's swift action on this matter, and once again laud Apple for its innovative efforts and service to millions of Americans.
Sincerely,
Charles E. Schumer

Republican Senator Lisa Murkowski Rejects Repealing Obamacare

Well, Murkowski is up for re-election in Alaska this year and she is being challenged in the Republican primary by a candidate named Joe Miller. If she can't be defeated in Alaska over this, it will never get repealed.

Is a head tax a valid part of the government's power to tax?

Can Obama make any honest statements?

When Congress required most Americans to obtain health insurance or pay a penalty, Democrats denied that they were creating a new tax. But in court, the Obama administration and its allies now defend the requirement as an exercise of the government’s “power to lay and collect taxes.”

And that power, they say, is even more sweeping than the federal power to regulate interstate commerce.

Administration officials say the tax argument is a linchpin of their legal case in defense of the health care overhaul and its individual mandate, now being challenged in court by more than 20 states and several private organizations.

Under the legislation signed by President Obama in March, most Americans will have to maintain “minimum essential coverage” starting in 2014. Many people will be eligible for federal subsidies to help them pay premiums.

In a brief defending the law, the Justice Department says the requirement for people to carry insurance or pay the penalty is “a valid exercise” of Congress’s power to impose taxes.

Congress can use its taxing power “even for purposes that would exceed its powers under other provisions” of the Constitution, the department said. For more than a century, it added, the Supreme Court has held that Congress can tax activities that it could not reach by using its power to regulate commerce.

While Congress was working on the health care legislation, Mr. Obama refused to accept the argument that a mandate to buy insurance, enforced by financial penalties, was equivalent to a tax.

“For us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase,” the president said last September, in a spirited exchange with George Stephanopoulos on the ABC News program “This Week.”

When Mr. Stephanopoulos said the penalty appeared to fit the dictionary definition of a tax, Mr. Obama replied, “I absolutely reject that notion.” . . .

The tax argument is clearly the strongest argument that the Obama administration has.

Jack M. Balkin, a professor at Yale Law School who supports the new law, said, “The tax argument is the strongest argument for upholding” the individual-coverage requirement. . . .

Yet, even assuming that this is now a tax, this is the first time that people have been taxed for not doing something.

Thanks to Tony Troglio for this link.

The transcript of the interview on ABC is here.

More on the question here.

More Americans giving up citizenship to escape taxes and regulations

The title in the Financial Times is pretty clear: Americans forfeit citizenship to avoid tax.

The number of wealthy Americans living in the UK who are renouncing their US citizenship is rising rapidly as more expatriates seek to escape paying tax to the US on their worldwide income and gains and shed their “non-dom” status, accountants say.

As many as 743 American expatriates made the irreversible decision to discard their passports last year, according to the US government – three times as many as in 2008.
The trend was particularly noticeable in the UK, where 190,000 Americans live and work. There is a waiting list at the embassy in London for people looking to give up citizenship, with the earliest appointments in February, lawyers and accountants say.

A few advantages are gained by forfeiting US citizenship, accountants say, in addition to keeping assets out of the US tax net. One is that doing so helps people who are interested in becoming domiciled in the UK, which has some inheritance tax benefits, particularly if you are married.

“If you have given up your US citizenship and are a long-term resident in the UK, it is a benefit if you are looking to acquire a UK domicile,” says Nick Osler, a tax director with Smith & Williamson, the advisors.

Another positive is that investments in individual savings accounts and self-invested personal pensions will not draw scrutiny from the Internal Revenue Service and remain tax-shelters, say advisers at London & Capital, the wealth management firm.

“Giving up your US passport doesn’t necessarily mean that you are able to become domiciled in the UK. But if you give up your US green card or your passport, you may have scope for that offshore money to stay out of the US tax web as well,” says Mike Warburton, tax director with Grant Thornton, the UK accountants.

“The big disadvantage with American citizens is they catch you on tax wherever you are in the world. If you are taxed only in the UK, you have the opportunity of keeping your money offshore tax free.” . . .

Even the New York Times notes that Obama may have broken key health care promise

This is only a surprise to the NY Times.

As the Obama administration begins to enact the new national health care law, the country’s biggest insurers are promoting affordable plans with reduced premiums that require participants to use a narrower selection of doctors or hospitals. . . .

The tradeoff, they say, is that more Americans will be asked to pay higher prices for the privilege of choosing or keeping their own doctors if they are outside the new networks. That could come as a surprise to many who remember the repeated assurances from President Obama and other officials that consumers would retain a variety of health-care choices. . . .

Gallup: Kagan has the lowest approval rating of any nominee who is likely to make it on the court

This is a pretty surprising result from the Gallup survey:

Typically, support for nominees does not change much after their hearings. Instead, Gallup usually finds increases in the percentage of Americans opposed and decreases in the percentage with no opinion. The percentage without an opinion on the Kagan nomination was the same before and after her hearings, which may indicate these were not widely followed by the average American.

The Senate Judiciary Committee will vote on Kagan's nomination next week, with the full Senate voting later this summer. Kagan is expected to be confirmed, given the Senate's large Democratic majority.

Among the general public, a majority of self-identified Democrats, 68%, favor Kagan's confirmation, compared with 43% of independents and 21% of Republicans. A majority of Republicans, 60%, are opposed.

If confirmed, Kagan would be the first successful nominee in recent years whose nomination was backed by less than a majority of Americans in the final poll before the Senate confirmation vote (or, in the case of Harriet Miers, before her nomination was withdrawn). . . .