January 8-9, 2018
Jan 08 09:47 The Wise Guys' deep conversation Jan 08 23:58 The face of tax reform winners Jan 09 00:44 Will this tide lift all ships? Jan 09 00:59 The face of tax reform winners, Part II Jan 09 08:47 Scott Newman demands MNLARS accountability Jan 09 10:44 The winning hasn't stopped Jan 09 12:51 About the MNLARS backlog Jan 09 17:25 2018: No wave, barely a ripple?
Prior Years: 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
The Wise Guys' deep conversation
A good friend of LFR sent me a video of this weekend's episode of the Wise Guys. This week, host Bill Bennett invited panelists Alan Dershowitz, Ollie North, Ari Fleischer and Steve Wynn into an intelligent debate about a wide range of subjects. The video is almost 42 minutes long, though it feels like it's a 10 minute video. That's because, in my opinion, these gentlemen spoke past the shiny object BS that we're weighed down with. Instead, they spoke about the fundamentals that built this nation. Ari Fleischer spoke about how our political system, over the long sweep of history, fixes itself. Professor Dershowitz asked Steve Wynn how he deals with the jealousy so prevalent in today's society. Hint: Wynn's reply to that question was both refreshing and bold. Ollie North said he didn't fear the future the way Professor Dershowitz did because he thinks that tomorrow's leaders will come from colleges, not the Ivy League.
First, here's the video:
[Video no longer available]
Here's Professor Dershowitz's question on jealousy and Steve Wynn's reply:
PROF. DERSHOWITZ: We have a man, Steve Wynn, who is a multibillionaire and the American Dream. He earned it all the hard way from nothing and yet, when they see the kind of wealth you have, there are people who resent it. I don't think they have the right to resent it. I think they have the right to demand a safety net. I think they have the right to demand a decent life but they have no right to take their wealth away. That's jealousy and it destroys one of the most important engines of capitalism but the perception of the disparity of wealth has become greater than it's become before because of the media and it is a real problem. So I wanted to ask Steve how do you deal with this in your personal life? How do we deal with it institutionally?
STEVE WYNN: In fact, I don't. Because I can't do anything about what other people think. My counterpoint to jealousy or envy is the only constituency that a successful businessman has is the jobs he's created, the people that work for him and the opportunities for a better life it gives to the people who are involved in his business family. The fact of the matter is the distribution of wealth on this planet is outrageously imbalanced. The 5 of us at this table are part of a group, Americans, who sit in one-tenth of one percent of the almost 8,000,000,000 people who occupy this planet. Just being in this country, we're privileged beyond any fair measure of meta-distribution. It has always been so...
Finally, Wynn nails it, saying "the only thing that's ever created a better life for a human being in the history of humanity is the demand for their labor. The more there is, the better the life."
First, if you have the time, watch this video. If you don't have the time, watch it, too. Watching Alan Dershowitz and Steve Wynn, both registered Democrats, discussing the role of government and the successes of capitalism was fascinating. Watching Wynn talk about not worrying about other people's jealousy towards his wealth, then pivoting to talk about his obligation to make his employees' lives better, was inspirational.
Government's role in the economy is to make sure everyone has a fair shot at prosperity. Special carve-outs stifle fairness and make prosperity for all difficult to achieve. This discussion was inspirational because it focused on foundational things rather than paying attention to click-bait things.
It's time for Republicans and Democrats to stop focusing on shiny objects and to start focusing all of our attention on foundational things.
Posted Monday, January 8, 2018 9:47 AM
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The face of tax reform winners
To those people that think the middle class is getting hit hard by the Tax Cuts and Jobs Act, they should learn about Eileen , "a recent college graduate with student loans. She's single, childless, and working in her first job out of college, making $41,000."
According to the article, "Without the new tax reform law, Eileen would take a personal exemption of $4,150, a standard deduction of $6,500, and an above-the-line deduction of $2,000 for interest she paid this year on her student loans. This means she only has $28,350 in taxable income, and would face a tax bill of $3776.25."
The good news is that, thanks to the Tax Cuts and Jobs Act, "Eileen no longer has a personal exemption, but her standard deduction nearly doubles to $12,000, and she keeps her student loan interest deduction of $2,000. This means her taxable income is now $27,000, and her tax bill is $3,049.50. She will see a tax cut of $726.75, or 19 percent."
Granted, $726.75 isn't the biggest tax cut I've ever heard of. Still, I'm betting that Eileen will be grateful for getting a significant tax cut because it means she'll be better able to pay off her student loans. Further, I'm betting that the strengthening economy will help her earn promotions and/or job security. We're already seeing that thanks to the Tax Cuts and Jobs Act. Frankly, Eileen has lots of reasons to smile:
Posted Monday, January 8, 2018 11:58 PM
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Will this tide lift all ships?
Andy Puzder knows a thing or 2 about economic growth and running large corporations. In Puzder's WSJ op-ed , he makes the case that wages will increase and growth will happen on a sustained basis. Thus far, the telltale signs are positive.
Puzder makes the case that "President Trump's regulatory rollback is driving an economic surge few anticipated. Tax reform promises to accelerate that growth by encouraging business investment and eliminating the perverse incentives that drive companies, jobs and investments to other countries. The true test for these pro-growth policies is whether they result in a more participatory economy, in which workers' incomes meaningfully increase over the long run. The early results are promising."
The other argument he makes is that "The left's proposed solution to wage stagnation has been for government to mandate increased wages by more than doubling the minimum wage from $7.25 to $15 an hour. That causes employers to eliminate jobs and reduce hours to offset their increased costs. To increase wages without these unintended consequences, you need economic growth."
The Obama administration specialized in tepid economic growth that caused people to drop out of the workforce or deal with stagnating wages. That's hardly a recipe for success. Further, the Obama administration's regulations strangled economic growth. The proof is in the proverbial pudding. Economic growth during the last administration averaged 1.5%-2.0%. Now, the slow growth gang is trying to claim responsibility for the suddenly-rejuvenated economy by saying they started the economic growth.
It isn't disputable that economic growth started in 2009. What's disputable is that it was meaningful economic growth. Economic growth didn't get back to normal until President Trump reduced taxes and eliminated the wet blanket regulations that stifled economic growth.
It wasn't until President Trump promised to get rid of the previous administration's policies that the economy took off. The night of his election, the stock market's futures were selling at a loss of over 800 points. When the traders regained their sanity in the morning, the market took off. In the last year, the NYSE has hit a new high 75 times. It's gone from 18,000 points to 25,000 points. Consumer confidence is soaring. People's 401(k)s are worth much more than they were a year ago.
Most importantly, job security is better. Frankly, Democrats are clueless about the economy:
Democrats once understood that. President Kennedy referred to economic growth as the "tide that lifts all boats." Yet no Democrats voted for tax reform in December. House Minority Leader Nancy Pelosi warned of 'Armageddon.' Sen. Bernie Sanders called it "a disaster." Sen. Elizabeth Warren claimed Republicans were "just delivering one gut punch after another to hardworking people."
That "gut punch" turned out to be bigger paychecks. After the GOP passed its tax bill, major U.S. employers including AT&T, Bank of America, Boeing, Wells Fargo, Fifth Third Bank, Comcast NBC Universal and Sinclair Broadcasting immediately committed to investing billions in growth, special bonuses or higher wages. Wells Fargo and Fifth Third are voluntarily increasing their base wages to $15 an hour.
If that's the definition of a gut punch, hit me with your best shot.
Posted Tuesday, January 9, 2018 12:44 AM
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The face of tax reform winners, Part II
It's easier to meet someone who's better off as a result of the Tax Cuts and Jobs Act than the media would have us believe. For instance, Ashley is a big winner as a result of the Tax Cuts and Jobs Act.
According to the analysts at The Tax Foundation, "Ashley is a single mom and owns her own business. This year her successful business will make $60,000. Ashley is very thankful for her mom, who cares for her one son, Jackson, when she is working many long hours, even on nights and weekends, as a small business owner. Without the tax reform law, Ashley takes $8,330 in personal exemptions and a standard Head-of-Household deduction of $9,550. This leaves her with a taxable income of $42,150. At her income level, she would pay $5,642.50 in federal income taxes, except that she qualifies for a $1000 child tax credit, which brings her final bill to $4,642.50."
Under the new tax law, Ashley will benefit in a few different ways. First, although personal exemptions are eliminated, Ashley's standard deduction will increase to $18,000, nearly twice as much as before. Secondly, and of critical importance to small business owners like her, Ashley can now also deduct up to 20 percent of her income because her business is a pass-through entity, meaning her business income 'passes through' to her as an individual. This means she deducts another $8,400 (or 20 percent of the $42,000 left after her standard deduction). This means Ashley has a total taxable income of $33,600. At her rate, this income would result in $3,760 in taxes before the child tax credit. Thirdly, Ashley also benefits from the doubling of the child tax credit from $1000 to $2000. This leaves her with a final tax liability of $1760. This means Ashley gets a tax cut of $2,882.50 .
During the final debate on the bill, Chuck Schumer said "the middle class would only get a pittance." Making $60,000 a year is certainly in the middle class. Saving almost $3,000 certainly isn't a pittance. That's a significant tax cut, one that I'm betting Ashley will certainly make good use of.
Posted Tuesday, January 9, 2018 12:59 AM
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Scott Newman demands MNLARS accountability
Sen. Scott Newman is right. Heads at MNLARS have to roll . The last time I wrote about the MNLARS disaster, I highlighted Joan Redwing's unserious answers . For instance, Redwing said "We are working on a release : it's important that we take the time to coordinate a road map. We need to make sure it's been properly vetted. : We do have a draft document, but I can't issue draft documents that will change."
One of LFR's astute commenters stated "Can you imagine if a private company's new software didn't work and their IT people said, 'well we are trying to build a road map for how to fix it : .'? They'd all be fired and then the CEO would be finding people who could fix the system ASAP, not finding people to make excuses and spend millions more trying to make it work. Just millions more down the rat hole of government just like MNsure."
I'll probably raise some howls by saying this but that's fine. If we privatized this project and operation, the chances are it'd be up and running smoothly. This is ridiculous:
Dana Bailey, executive director of projects and initiatives at Minnesota IT Services, said after the hearing that lawmakers will have an answer soon. Bailey said Newman's call for resignations would not be helpful. "Mass exodus of any fingerprints that have ever been on the project would be incredibly unfortunate," Bailey said. "You need that institutional knowledge about what was happening with the system and how it was built and what was happening in order to fix it."
Right. Because all that institutional knowledge has been invaluable thus far in fixing the problem. I don't know where they'd be without that institutional knowledge.
This video speaks to the problems MNLARS is experiencing:
[Video no longer available]
Based on the testimony provided and the history of MNIT, it isn't likely that this problem will get fixed soon. MNsure certainly didn't get fixed quickly. Why should we expect differently this time?
Posted Tuesday, January 9, 2018 8:47 AM
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The winning hasn't stopped
Friends, I can't tell you how much I enjoyed writing this LTE . I've made a point of highlighting how the Tax Cuts and Jobs Act is already benefitting the middle Class. (See here , here , here and here .)
That's before talking about how the "Dow rose 25%, the S&P 500 rose 19% and the NASDAQ rose 28% in 2017. With the stock market hitting 75 new record highs, employee 401(k)s are getting fatter. I'd love hearing Democrats explain to the 70% of Americans with retirement plans, mutual funds or directly invested in the market how they aren't winning."
The Democrats made idiots of themselves while debating the Tax Cuts and Jobs Act. Nancy Pelosi said that the Tax Cuts and Jobs Act was like Armageddon. Sen. Schumer, on the Senate floor, said that "Republicans will rue the day" that they pass the Tax Cuts and Jobs Act. Not only are Democrats wrong. Their predictions have been off by 180 degrees. Democrats said that the middle class would get hit with major tax increases. I'd love hearing them say that now that "American Airlines Group Inc." gave "their employees a $1,000 bonus" and "Aflac [made] the following commitment to our U.S. workforce: 1. Increase the company's 401(k) match, from 50% to 100% on the first 4% of employee contribution, while making a one-time contribution of $500 to every employee's 401(k) plan and 2. Offer certain hospital and accident insurance products to all employees free of charge, as the company currently does with its core cancer insurance product."
Why would anyone trust the Democrats with tax cuts or the economy? Here's Sen. Schumer with his famous line:
[Video no longer available]
Here's my message to Sen. Schumer: The middle class won't hold it against Republicans when they're paid $1,000 bonuses or they receive significant pay increases or when their companies make more generous contributions to the employees' 4011(k)s. It's just that simple.
The anger that Sen. Schumer is attempting to manufacture simply won't happen.
Posted Tuesday, January 9, 2018 10:44 AM
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About the MNLARS backlog
Republicans are furious that MNLARS has a backlog of 374,000 unprocessed vehicle titles . First, MNLARS stands for Minnesota Licensing and Registration System. The Dayton administration's rollout of MNLARS is just as troubling as the Dayton administration's rollout of MNsure. Apparently, the DFL hasn't figured things out when it comes to IT projects. (For that matter, healthcare.gov on the federal level wasn't exactly smooth, either. Perhaps, Democrats should get some training courses from IT professionals?)
What's stunning is that the DFL is putting a higher priority on making employees whole rather than fixing MNLARS. "Rep. Rick Hansen, DFL-South St. Paul, said he and a handful of other lawmakers will introduce a bill next year that would set aside $10 million to help compensate the deputy registrars' offices for lost revenue. He likened the debut of MNLARS to hitting an iceberg and said he's worried the impact will be particularly destructive for local offices that rely on the system. "I think it's really important that we make the deputy registrars whole for their costs that have been incurred through no fault of their own," he said in a House committee hearing on MNLARS last week. "They got hit by the iceberg, too."
Let's be clear about this. MNIT is the iceberg. They didn't implement this thing right. What's particularly aggravating is the fact that they've had years to implement it properly. There's no justification for it not getting implemented properly in that amount of time.
[Video no longer available]
In the video, Gov. Dayton said he'd like to apologize for the mistakes that've been made by MNLARS. Gov. Dayton, we need a system that works, not an apology from an inept government filled with inept bureaucrats. Towards the end of the video, a gentleman summed things up perfectly, saying "It's not a bad launch. It's a bad system."
Thus far, the state has spent $93,000,000 on launching MNLARS. There's no way that would've been tolerated in the private sector. Further, the problem would've gotten fixed in the private sector. Finally, it wouldn't have cost $93,000,000 to fix. It might've cost one-tenth of that at best.
When a profit/market share incentive is introduced into the equation, things get done right the first time. There's no time for the Joan Redwings of the world to say "We are working on a release : it's important that we take the time to coordinate a road map. We need to make sure it's been properly vetted. : We do have a draft document, but I can't issue draft documents that will change." The problem would've gotten fixed immediately or Ms. Redwing would've gotten terminated immediately.
Posted Tuesday, January 9, 2018 12:51 PM
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2018: No wave, barely a ripple?
For most of 2017, the MSM has predicted a "big blue wave." Saying that I'm skeptical of that is understatement. First, I haven't seen many predictions of Republicans losing seats in the Senate. Wave elections happen when the people are in a 'throw the bums out' mindset. They're 'mad as hell and they aren't about to take it anymore.' How can people be mad as hell about House Republicans, who passed the full GOP agenda, but be satisfied with the Senate, which can claim tax reform and confirming Neil Gorsuch as their accomplishments?
It's important that we remember that the House has a bunch of seats that aren't as vulnerable as they've appeared to be. When the 2010 wave hit, it demolished the House map for a decade. I remember writing about it then. I remember that Republicans didn't just gain 63 seats in the U.S. House of Representatives. They demolished Democrats in state legislatures and governorships, too. Half the states had a Republican governor presiding over GOP majorities in the House and Senate for redistricting. That meant Republicans could redraw districts so that vulnerable GOP districts suddenly became solid GOP districts.
In short, it was a game-changer. Then there's this :
The Republican fundraising edge suggests a reinvigorated political base, which has historically turned out in droves for midterm elections when Democrats have stayed home. According to a recent Pew poll, more than three-quarters of Republicans approve of President Trump, including an overwhelming majority of evangelical voters.
Recent polling does not even account for the expected bump from the Tax Cuts and Jobs Act, which has already spurred Boeing, Comcast and other U.S. companies to set aside billions of dollars in private investment. As hiring increases and paychecks swell, Republicans will certainly reap electoral benefits after passing tax cuts without Democratic support.
Enthusiasm + fundraising ability = a distinct advantage:
That enthusiasm is there. This afternoon, I received a fundraising email from Karin Housley's campaign. Her campaign started on 12/19 . Here's the eye-popping information from the email:
During the last two weeks of December, we were able to raise over $150,000!
Call me crazy but I think people are excited about Republican Senate candidates. This information is heartwarming, too:
The Republican National Committee (RNC) raised a reported $130 million in 2017, more than twice the Democratic National Committee's (DNC) haul. Much of it came from digital fundraising, as the RNC added more than 1 million email addresses in the last quarter of 2017 alone .
It's heartwarming if you're a Republican House or Senate candidate. As the tax cuts take effect and the economy starts creating hundreds of thousands of jobs and people start feeling like their lives are improving , people will notice that the recovery has kicked in. Every economist worth his/her salt will tell people that there's a time lag between when a recession officially ends and when people feel like the recovery officially kicks in.
These tax cuts will help people feel like the recovery has officially started. Guy Benson has written some stellar articles on the tax cuts. This is another such article . This illustrates things perfectly:
This will definitely help the middle class, too:
Summarizing, wages are increasing, 401(k)s are getting bigger, people's electric bills are dropping, non-executive employees are getting bonuses and consumer confidence is soaring. Other than that, things are pretty mediocre. What are those poor Republicans gonna run on?
Posted Tuesday, January 9, 2018 5:25 PM
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