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Things That You Won’t Like in 2015

January 1, 2015 by Llewellyn King 2 Comments

The new year demands predictions. As those demands must be satisfied, here are mine:

1. President Barack Obama will be blamed for everything, from pet obesity to sunspots.

2. Jim DeMint, president of The Heritage Foundation, will continue to solicit me for money and will write me ingratiating letters as one conservative to supposedly another. Things are terrible because of Obama, he will say. But if I send him five bucks, the day can be saved for America.

3. Sen. Al Franken (D-Minn.) will ask me for money, five bucks, to save America from the likes of DeMint.

4. Amtrak – whose high-speed train between Washington, D.C. and Boston, Acela Express, is so expensive only rich business people can afford to ride it — will seek a larger federal subsidy. At present, it stands at $1.3 billion. Ordinary people, who Congress had in mind as riders, can’t afford the Acela's astronomical and predatory fares. So it has become a service for business executives and corporate lawyers — you can tell from the overheard cell phone conversations. A billable hour is a terrible thing to waste.

5. The airlines will find new ways to discomfort you; watch out for toilets that big and tall people can't sit on, seats that recline a 16th of an inch, and bad food that you'll buy only if you're off your medicine. Don't change your ticket, bring a suitcase or seek a seat with legroom. There are fees for that kind of convenience and comfort. Don't ask for logic in routing: How about Providence to Washington, D.C. with two stops and travel time of 10 hours and 20 minutes? An air travel Web site tried to tempt me with that “super-saver” fare. I reckon you could hitchhike it in about the same time.

6. If you thought it was difficult to reach any large company in 2014, it will be much worse in 2015. There are consultants out and about America, teaching corporations how to avoid their customers. Gone are the days when you could expect customer service of some sort, albeit from Rajiv in Bangladesh. Amazon, always a pioneer, has produced the consumer go-have-sex-with-yourself masterpiece. If you have a question about your Kindle, you have to give them your credit card if you want it answered. It's the no-pay-no-help line.

7. Talking of the perils of being a customer, Bank of America refused to give me the phone number of the local branch where I have an account. When I finally got through to the manager, she said they didn't give out the number because “the phone would be ringing off the hook.” I didn’t know people called the bank just to chat. No thought that those callers might be customers. Just remember new the mantra of big business: “The customer is always wrong, a nuisance, and fitted for nothing better than hanging an hour on the phone with a simple inquiry.”

8. Next year the save-a-buck Congress will decimate the Post Office. Sad because it's the one place that still works, and where you can get a question answered promptly. That will not do. The Social Security Administration is efficient and polite, too. So Congress has its hatchet out.

9. Now that the Republicans have control of government, they'll be out to prove that government doesn’t work. I’m sure they will pull it off. The Democrats will be complaining – having snatched defeat from the jaws of victory in the midterms.

How can you lose an election when the economy is turning around? Ask Sen. Franken when you send him your five bucks. Bet he won’t tell you. So I will. You turn your back on your president. That makes you look really bad, and looking really bad is a bad election strategy.
 

Happy New Year! — For the Hearst-New York Times Syndicate

 

Filed Under: King's Commentaries Tagged With: Acela, Amazon, Amtrak, Bank of America, Jim DeMint, Kindle, King Commentary, President Barack Obama, Republicans, Sen. Al Franken, Social Security Administration, The Heritage Foundation, U.S. airlines, U.S. Postal Service, U.S.Congress

The Media-Pollster Axis Stole the Election

November 16, 2014 by Llewellyn King Leave a Comment

Politics is the hot ticket in journalism these days. Young reporters long to cover Capitol Hill, when once they longed for the exotic life of the foreign correspondent. “Timbuktu or bust” has become “Washington or fail.” Journalism's stars today are those who can reel off the precincts of Iowa or the hobbies of senators, not the wonders of rural Sri Lanka.

Yet the passion for politics that has seized the Washington press corps and those who want to join it across the country has not been reflected in the public – not, at any rate, by the abysmally low national turnout of 36. 3 percent on Nov. 4, arguably one of the most important midterm elections in a long time.

It was the lowest voter turnout in 72 years: a seeming monument to voter apathy. Certainly not the sign of a seething, unhappy electorate which believes the bums should be thrown out because the country is on the wrong track. That may be so, but you wouldn't know it from the voter turnout.

The voter turnout wasn't large enough for anyone to claim that the country has veered to the right, or that the victors have a mandate. Yet we know President Obama is held in low esteem, although not as low as the risible contempt in which Congress is held.

If the voters didn't come out in large enough numbers to give us a clear reading, how do we know that Obama is on the ropes and that Congress is despised? We know it, without doubt, from the innumerable opinion polls which are now part of the journalistic toolbox.

There is no doubt about the public mood. So why didn't the public vote when there was so much journalistic enthusiasm for the election; when an amazing amount of television time, especially on cable, was given to politics; and when radio goes at politics 24-7?

The paradox may be journalism and its commitment to opinion polls, largely funded by the media. If you know who is going to win the match, why buy a ticket?

The passion in journalism for politics has made politics a victim, robbed it of surprise and tension. I voted without passion because I had a very complete picture of the outcome before I did my civic duty. It was like reading an otherwise gripping who-done-it, when I already knew it was the butler.

The metadata people, like Nate Silver, aren't helping either.

When newspapers are cutting their staffs and budgets are tight, why is political coverage and polling out of Washington thriving? First, it is cheaper to create news than find it. With polls, you scoop the election result. Second, there is a large pot of money for “political issues” advertising that has given rises to a raft of new outlets, forcing old-line media to double down.

Washington politics is no longer a franchise of The Washington Post and The New York Times. It has its own trade press, led by the upstart and well-funded Politico, a big news predator in a school of hungry fish. There is The Hill, Roll Call, National Journal, RealClearPolitics and more than a dozen others, like The Cook Political Report and Talking Points Memo.

It is these new entrants, with their access to instant electronic delivery, that have led the change and fueled the frenzy. They are in danger of becoming the game instead of covering it. They have become more interested in what the polls say than what the politicians say.

On Capitol Hill, members of Congress are in bunker mode. They are afraid to say anything or look a bit tired, distressed or unkempt because these ill-considered words and unflattering images will be flashed across the Internet – there to be retrieved at any time, for all time.

There is a joke around Washington that if a member of Congress breaks wind, Politico will have the story. In this new world, every trifle is recorded and archived. Is this the way to foster statecraft in a dangerous and unforgiving world? Let's poll that question, shall we? — For the Hearst-New York Times Syndicate

Filed Under: King's Commentaries Tagged With: King Commentary, Nate Silver, National Journal, Politico, Politics, President Obama, Roll Call, Talking Points Memo, The Cook Political Report, The Hill, The New York Times, The Washington Post, U.S. midterm elections, U.S.Congress, Washington D.C.

A Primer for the New Congress

November 10, 2014 by White House Chronicle Leave a Comment

Welcome to Washington, new members of Congress. It is a city of museums, statues, self-importance and arcane ways.

After a post-campaign vacation, you will be ready to take on the world — or at least this city — and begin to make things right. You are coming here to cut through the crap, straighten out the mess, to return the peoples’ government to the people.

You are feeling good, even invincible. This sense of euphoria and possibility is normal. It is nothing to be worried about — and it will pass.

As most of the new class is Republican, you are going to stop the rot come what may. No more liberal shenanigans, no more creeping socialism, no more welfare state, no more European-style mollycoddling of the undeserving.

You are going to loosen the shackles on business and watch it rise like a jolly green giant who has shaken off his captors, including the Bureau of Land Management, the Fish and Wildlife Service, the Bureau of Ocean Energy Management, the Federal Energy Regulatory Commission, the Nuclear Regulatory Commission, the Department of Energy, the Environmental Protection Agency and the Internal Revenue Service.

Oops! Before we go any further, maybe you should pick a target. EPA and IRS are very unpopular — those two are enough for now.

It goes without saying that you are against Obamacare and that should be repealed, or go unfunded, or be replaced with something. Be careful: it may not be as unpopular with your constituents as it is at the country club.

But do not let things like that worry you. You have been elected to Congress. Hallelujah! Reality will not set in until you get to your first caucus, or you see the lousy office you have been assigned, or you learn that that committee appointment you cherished is not coming your way.

Again, worry not. You are about to make a lot of new friends; really nice people, people who will do anything you ask. They have advice about where to live, whom to hire, what schools to send the little ones to — if you have not already decided to leave them back home, which you may when you find out the cost of housing in Washington.

Anyway, the new friends will help you through the intricacies of being a member of Congress. They will advise you on which forms to fill in, how to get your expense reimbursements. Such helpful people. They will also give you advice on issues that are new to you, like net neutrality, the Law of the Sea, and the reason companies have to move overseas.

Amazingly, they also have tickets to wonderful sports events with local teams: the Redskins (football), the Capitals (hockey), the Nationals (baseball). They also have tickets to cultural events, from plays at the Kennedy Center to exhibitions at the National Gallery of Art. It helps so say you love the arts when you are railing against the National Endowment for the Arts, PBS and NPR.

These new friends are the lobbyists, and they have your number already. They know what you like to drink or eat, and whether you prefer to bike, hike or sail. Everything can be arranged. Trust them. They will also guide you on delicate legislative issues; no pressure, just guidance. And who are you to refuse a friend?

Dear Democrats, you are not forgotten but not well remembered either. Your party lost, and you know what that makes you. For two years you must walk the halls of Congress mumbling about income redistribution; how many successes President Obama actually chalked up, but failed to trumpet; and cursing, under your breath, the presence of money in politics — unless it is union money.

There will also be real pleasure for you in thinking up hateful things to say about the new Senate majority leader, Mitch McConnell, and be quoted saying them in social media.

Whatever your party, as your first term wears on, you will get to feel at home on Capitol Hill. You will know how to play the lobbyists, one against the other, and how to discomfort the leadership of your own party. But mostly, you will come to love Big Government. Welcome to the Washington elite. — For the Hearst-New York Times Syndicate

Filed Under: King's Commentaries Tagged With: Capitol Hill, Democrats, King Commentary, lobbyists, midterm elections, President Obama, Republicans, U.S. House of Representatives, U.S. Senate, U.S.Congress, Washington D.C.

Europe Faces Winter on the Edge of the Abyss

November 3, 2014 by White House Chronicle 1 Comment

BURGENLAND, Austria –There is another world crisis brewing – and one for which President Obama cannot be blamed. The Europeans and have made a mess of things, and now the wolves are at the door.

The first snarling wolf is deflation. Europe’s economies are so weak, so close to recession, that the very real danger of deflation – falling prices – has its economists petrified. It ought also to have its politicians in anguish, but whether it does is less clear.

Europe’s big-driver economy, Germany, as well as France and Italy, are on the edge. The German miracle is ailing, and Berlin may have been writing the wrong prescriptions for the rest of the 18 countries that share the euro as their currency. It has been aided in this effort by the International Monetary Fund.

That prescription, which often seems to harm the patient, as in Greece and Spain, is for austerity – which appears to work better on paper than in the real world. Germany worries about profligate borrowing throughout the European Union. But if the German economy is to escape recession, Chancellor Angela Merkel may have to borrow some money herself and inject it into infrastructure spending to keep Germany competitive and its workers on the job.

The European Central Bank (ECB) has been slow to institute a badly needed program of buying qualified bonds, known as quantitative easing. In the United States, the Federal Reserve, in a program that is now ending, has pumped more than $1 trillion into the economy and helped pull the economy out of recession. But ECB has been timid because it has no clear direction from the European political establishment — pointing up how cumbersome and directionless the European Union structure has become. It has a parliament, which has no power, and is increasingly attracting members who are actually opposed to the European project.

The European Commission has arguably too much power centered in the bureaucracy in Brussels, but no clear direction form its controller, the Council of Ministers. Trouble is the ministers can disagree and veto needed courses of action.

The economic crisis points up the ungovernable nature of Europe and its present institutions. If Washington is gridlocked, Europe is by structures that cannot deal with crisis and what often appear to reflect as many policies as there are members (28) in the EU.

But it is not just the economic wolf that is at Europe’s door. The Russian bear is there, too. Already there is an undeclared war raging in Ukraine.

At the Association of European Journalists' meeting here, a spokesman from the Ukrainian government, who asked not to be identified by name, expressed the sense in Ukraine that it has been betrayed by EU bungling.

“Europe sees Ukraine as its European neighborhood partner. But in Ukraine, the truth is different: Ukraine’s view is that Europe let us down. We are hurt, bleeding. We have been betrayed by a neighbor that, six months ago, we saw as a brotherly nation,” he said.

What was not said was that Europe may freeze this winter if the Putin regime — a growling wolf — wants to punish Ukraine and its neighbors. Europe is hopelessly dependent on Russian gas, which is used mostly for heating. Germany gets 40 percent of its gas from Russia, and Finland, Estonia, Latvia and Slovakia get 90 percent. Russian gas makes its way — largely through Ukraine — down into Italy, and even the United Kingdom has some small exposure.

If the gas goes off, Europe freezes and its economies go south in an avalanche. The most hopeful thing for Europe this winter is that with the world oil price falling, Russia’s own fragile economy may dictate that it keeps the gas flowing — but it will force up the price where it can.

Washington, with a new Congress, might want to brace for Europe’s winter of crisis and disaster. If Europe goes into severe recession, can the U.S. economy escape major harm? The new Congress will be on a sharp learning curve. — For the Hearst-New York Times Syndicate

Filed Under: King's Commentaries Tagged With: Association of European Journalists, austerity, Europe, European Central Bank, European Commission, European Union, German Chancellor Angela Merkel, Germany, King Commentary, oil, Russia, Russian gas, U.S.Congress, Ukraine

Denigrating the Unemployed; at Christmas, Yet

January 3, 2014 by White House Chronicle 1 Comment

 
In order to execute an abomination, it helps to create myths about the victims: the Jews aim for world domination, all gypsies are thieves, all blacks abuse government assistance programs.
 
It's a national abomination that 1.3 million Americans lost their extended unemployment benefits over Christmas. Bring forth the myth: Extending benefits only causes the unemployed to prolong their search for work, or not to look for work at all. End the benefits and they'll find work.
 
This suggests that suddenly unemployment will fall nationally from 7 percent to who knows? Myths are great for ratiocination. Want to bet that ending extended unemployment benefits won't move the unemployment number at all?
 
Being unemployed isn't a vacation. It's not a glorious excuse to watch television at home and snigger at working stiffs who get a paycheck, have savings, take vacations, hope for promotions, and whose children will be able to afford to go to college.
 
Unemployment means cold economic fear — fear of not being able to provide for yourself and your loved ones; fear that your marriage will crumble; fear that your children will have the humiliation of not having the clothes, the electronic gadgets, the sports equipment, the vacations, the meals out and the college education, without which one is doomed to second-rateness.
 
What happens when a breadwinner loses a job? Fear for the future becomes a constant companion: it erodes the good times of family life and confiscates future plans. The specter of hunger and homelessness pushes out laughter and dreams. Worry moves in and begins to dominate a household; an unwelcome but palpable presence.
 
People who are sick to their stomachs with economic worry don't laugh much. Joblessness silences the normal joys of life.
 
Unemployment is not something I've read about. As a young man, I suffered its debilitating privations both in London and in New York. I was even evicted from an apartment in New York because I couldn't pay the rent. Where will I go? How will I eat? What will become of me. These survival fears are multiplied a hundredfold when there are dependent children.
 
The jobless, although they may be so through no fault of their own, blame themselves and sink into self-flagellating despair. The desire to work where there is no work is a hunger to belong, a hunger to be useful, a hunger to provide for loved ones, and a hunger for the simple dignity of going to work.
 
Going to work is a beautiful thing. Not going to work is an ugly thing – ugly in all the horrors that can descend on a person or a family.
 
Unemployment insurance is not the solution, but it's a help; it's not a substitution, just a help – a desperately important shelter in a storm. It's not, as one conservative commentator suggested, about paying people not to work. It's about paying people to live, until they find work in an economy that is changing the very nature of work.
 
In his masterpiece “The Sun Also Rises,” Ernest Hemingway wrote:
 
“How did you go bankrupt?” Bill asked.

“Two ways,” Mike said. “Gradually, then suddenly.”
 
If Congress follows Senate Majority leader Harry Reid's plan to pass a three-month unemployment benefits extension when it reconvenes on January 6, then a ghastly Christmas nightmare will be somewhat alleviated for 1.3 million Americans, who gradually or suddenly fell out of work – and some into bankruptcy – and will still have to pound the pavements, looking for those elusive jobs that will bring hope and dignity back into their shattered lives.
 
No unemployment checks for our fellow Americans is an abomination, originating with congressional indifference, buttressed by conservative mythology. — For the Hearst-New York Times Syndicate

Filed Under: King's Commentaries Tagged With: jobless, jobs, U.S.Congress, unemployed, unemployment benefits, work

Amtrak at 42: Making the Grade

May 7, 2013 by White House Chronicle 2 Comments

Two cheers for Amtrak, which celebrated its 42nd anniversary on May 1. The nation's only intercity passenger rail service, derided by its critics and begrudged funding by Congress, is providing improved service and reliability.

But this service is lopsided, favoring the Northeast Corridor — the electrified route from Washington to Boston. Here, you have a choice of two levels of service. The premier level is the Acela Express, a Swedish import. Reaching speeds of 150 mph, the Acela trains compensate for tight curves with sophisticated tilting technology. The second level is the Northeast Regional with traditional trains running up to 125 mph, but mostly traveling much slower and with frequent stops. In both levels of service, the trains seem to be clean and well-maintained.

The two principal Northeast stations, Penn Station in New York and Union Station in Washington, are a different story. They are both horrific in their own way, and both are maintained by Amtrak.

Penn Station has a lot of low-grade retailing that seems to attract people who have no plan to ride the train and add to the sense of urban threat.

Union Station is less threatening, but it seems to have given itself over to chain retailing. The grandeur of this architectural masterpiece has been undermined by a proliferation of chain stores. Passenger accommodation is an afterthought: The restrooms are inadequate and too few, seating is scarce and often shabby, and passengers stand in long lines waiting to board their trains. This gives the feeling that the trains are as bad as the stations; they are not.

Outside of the prized Northeast Corridor, Amtrak shows decades of underinvestment. It tries to deliver rail service across 46 states. Correspondents tell me that this is often inadequate and is a last resort. I've been told horror stories about delays in Florida and the Midwest and breakdowns in California. One has to think seriously about whether one wants to take a long-haul train, even a sleeper, outside of the Northeast Corridor.

Amtrak came into being 42 years ago because passenger rail service from commercial railroads had collapsed and Congress felt that the United States couldn't be without passenger rail service. In those days, it was thought that Amtrak would serve those who couldn't afford to fly and those who simply didn't like flying. Amtrak wasn't set up as a government department but rather as a business, although it was understood that government funding would be necessary.

So began a long struggle; ostensibly over money, but more so over ideology. Conservatives in Congress have never liked Amtrak, and have believed that it should either perish or survive without government funding. Amtrak initiated relentless mallification of its station properties and predatory pricing in the Northeast Corridor, euphemistically called revenue management. Here Amtrak, like the airlines, charges what the traffic will bear. The Acela between Washington and New York and between New York and Boston is fast, elegant transportation for those who can afford it. The Northeast Regional uses the same revenue-management pricing, but charges somewhat less for slower rail service.

By means of its commercial struggling, Amtrak says it is able to cover 88 percent of its costs from revenue. The government subsidy amounts to $1.3 billion — $443 million for operations and $705 million for capital improvement. The total Amtrak budget is around $4 billion. By comparison, the much-admired European rail systems, with their sleek trains that run at 220 mph, have huge subsidies amounting to about 50 percent of the ticket price. In that sense, Amtrak may be a model performer.

As a passenger, someone who is infused with a sublime sense of well-being when a train pulls out of a station, I'm glad to report that despite its limitations, its chaotic terminals, its gotcha pricing, Amtrak has rolled into middle age, proving that rail transportation is still the most civilized way to travel and should have a bright future. Will Congress get smart and take the train? — For the Hearst-New York Times Syndicate

Filed Under: King's Commentaries Tagged With: Acela Express, Amtrak, Northeast Regional, Penn Station, U.S.Congress, Union Station

The Economy Is Righting, but Does Congress Get It?

January 31, 2013 by White House Chronicle Leave a Comment

The great thing about being a pessimist is that something awful may still happen tomorrow. There are still plenty of pessimists about the economy, saying that we are spending our way into perdition; that the Great Reckoning is just around the corner, unless we do draconian things.
 
However on Wall Street, there is hopefulness — even optimism. The stock market is up, the housing market is showing real life and corporate confidence has increased since the Congress delayed action on the fiscal cliff through a bit of old-fashioned give-and-take. Some economists are saying encouraging things, so are the business magazines.
 
There is evidence that the economy, which was heeling badly, is beginning to right. The U.S. economy, still the economic lungs of the world, is breathing easier.
 
Sure, there was a slight dip in performance in the last quarter, reflecting primarily reduced defense spending. It's a hard lesson for the political right to grasp: You can't extrapolate family financial rectitude into national policy, as they like to do. If a family spends more than it is earning, it simply has to cut expenditures. If it doesn’t, the end is known; credit dries up and horrors, like foreclosure, are at hand. Likewise, corporations cut costs, lay off employees and sell assets until the balance sheet recovers.
 
When a family gets into trouble, it doesn't reduce its income by cutting luxuries, it reduces its spending. When a corporation cuts back, it tries to reduce staff not customers.
 
But governments can worsen the situation when they tackle spending at the wrong time. If they cut expenditures too aggressively and too fast, revenues fall, unemployment rises and demands on the public purse grow. Unlike individuals and corporations, governments can’t walk away from their messes.
 
Witness the recessions in Britain, Ireland, Spain and the total catastrophe in Greece. Irresponsible austerity has compounded the results of earlier promiscuous spending. Strong medicine has sent the patient to intensive care.
 
Amy Kremer, head of the Tea Party Express, and many conservative members of Congress playing the pessimist’s card, like to say, and they say it often, “revenue is not the problem, spending is.”
 
If only it were that simple. The problem is many things, including the global recession, the aging population, the high cost of medicine, two wars, badly timed tax cuts, China’s undervalued currency and the balance of payments deficit.
 
Take your pick. The miracle is that the economy is as vigorous as it is.
 
Already it has to deal with the tax increases that came with the budget deal in early January, particularly the increase in the payroll tax, which takes out of the economy money that would normally be spent — the large proportion of the tax which if left in the hands of the salaried class would be disposable. This may be about as much of a hit as it can take at present.
 
But the pessimists, who believe that spending is the mortal sin of our age, want to let sequestration — a 10 percent across the board cut — happen on March 2. The Washington Post says there is no mood in Congress to compromise. But if there is no compromise, the effects could be more devastating than a simple cut in spending. The result, instead, will be a cut in program expenditures while the government’s overhead in salaries and fixed costs will eat up the budget.
 
Austerity has been a disaster for Britain, Ireland and Spain. Do we want to follow the Europeans down that path?
 
The pessimists, who also believe that borrowing is the original sin of politicians, would let this recovery falter through their belief that the government must be starved. Sequestration will starve it, alright. Trouble is we'll all go hungry. There’s pessimism for you. — For the Hearst-New York Times Syndicate

 
 
 
 
 
 
 

Filed Under: King's Commentaries Tagged With: Amy Kremer, austerity, conservatives, Europe, federal budget, sequestration, Tea Party Express, U.S. economy, U.S.Congress, Wall Street

Hail to America’s Microbusinesses

January 24, 2013 by Llewellyn King Leave a Comment

To hear the members of Congress tell it, small business – which exists in a mythical place in America along with mummy and apple pastries – has just two problems: marginal tax rates and government regulation.
 
For most small businesses, these aren't the problems at all. It's the complexity of taxes and regulations that is the problem.
 
To understand the predicament of small business today, one needs to get a grip on what it is. The Small Business Administration defines small businesses as those with 500 or less on the payroll. But to most small businesses, the bar is lower by a factor of about 10. Most owners think they have moved to a different place if they can number their payroll in the dozens.
 
Really small businesses, also more appropriately called microbusinesses, according to the National Association for the Self-Employed (NASE), are those with about 12 employees. These are the businesses that create jobs fast when the economy improves. This is where the rubber of entrepreneurism meets the road of reality.
 
These are Americas real entrepreneurs; these are the people who “go on their own,” preferring self-employment to job security. They aspire to make a living first; making a fortune is a distant second.
 
They may repair cars, make artisan bread, book travel, sell yarn, repair computers, print menus, stage events, publish newsletters, houseclean, landscape, stuff sandwiches, shop for others, manage other peoples’ eBay accounts, test for pollution, paint houses and bird dog the paperwork on import-export.
 
Their governmental enemy is not the rate of taxation, as we were told in the debate that led to the fiscal cliff agreement, but rather the complexity of the tax code. Likewise with regulation, licensing and permitting
 
Keith Hall, who advises the 150,000 member-strong NASE, on tax issues says that microbusinesses are overburdened by the complexity of the tax code and have to spend money they can't afford on accounting fees; or, if they enter into the tax labyrinth themselves, risk making mistakes that can lead to costly audits, and as often as not overlook legitimate deductions.
 
The tax code is a war zone for the single entrepreneur, Hall says. Worse, he says, it favors big business both in the way taxes are calculated and in the deductions allowed. Big companies routinely claim deductions that wouldn't be allowed for microbusinesses: “The playing field is not level,” Hall says.
 
One of the biggest problems centers on health care. The unincorporated entity — say, Jim Smith trading as Gold Limousine — cannot deduct his health insurance. The various forms of incorporation have their own penalties, and all involve time and the need for professional help to administer them.
 
Incorporation is not a panacea for the self-employed. Its primary purpose is to limit liability to the incorporated entity and to facilitate a possible sale of the company, or the taking of equity capital.
 
The distress over the tax code is equaled by employment regulations,environmental mandates and rules about working conditions.
 
But all this is nothing compared to the real enemy of small business: big business.
 
Big businesses, particularly chain retailers and restaurants crush small businesses. They crush them every day. The arrival of Walmart, Home Depot, Target or Staples spells death for dozens of small businesses in the neighborhood.
 
The redevelopment of old neighborhoods, where small businesses flourish, also can be fatal. The local mall is a sanctuary for big retail and a mass grave for small endeavors.
 
The lot of the new business, the small new business, is harder today than it has been historically, as there are fewer fields where the behemoths are not dominant. Also banks lend on formula not character, landlords favor the big and established over the new and enterprising.
 
Yet the urge to be in business continues; the lure is freedom, maybe success and the knowledge that you tried. If you want to see the entrepreneurial spirit at work, visit a decayed strip mall. There you'll find rents that are low and hopes that are high.
 
Of course, you could go to a business school and see the creation of another kind of entrepreneur: the corporate animal learning about business plans, return on equity, takeover strategy and how to get a window office.
 
I say the real entrepreneur is the guy with a fishing boat in Maine, or the single mother with a staffing agency in Oregon. — For the Hearst-New York Times Syndicate

 
 
 
 

Filed Under: King's Commentaries Tagged With: Home Depot, microbusiness, National Association of the Self-Employed, Small Business Administration, Staples, Target, tax code, U.S.Congress, Walmart

In Congress, Party Loyalty Trumps Conscience

February 11, 2010 by Llewellyn King 1 Comment

 

All those people who treat politics like baseball may have to start again. All those statistics about what happened in off years down through our history, all those references to recurring political phenomena, like the impact of the weather on elections, are null and void.

What’s changed?

We’re moving from government as we have known it — a system of two parties modulated by bipartisanship on many issues, where factors other than ideology matter to members of Congress — to a new order in which party loyalty trumps conscience.

Congress is acting more like a parliament than a congress. People who have been clamoring for a Congress more like the British Parliament, with features like “Prime Minister’s Question Time,” have got more than they wanted. They’ve got something like the British party system, and it is not a step forward.

While watching the Brits go at it on C-SPAN is good sport, and certainly tests the mental acuity and verbal dexterity of the players, it is an inflexible way of governing.

Despite the jolly repartee and the openness of discussion, the House of Commons can be a sterile place. The individual member feels impotent and frustrated. Unless a member loves constituency work with a passion, they can feel very unloved by the parliamentary legislative process.

The former Conservative M.P. Matthew Parris has written brilliantly about the impotence of the backbenchers in his autobiography. He abandoned elective politics for journalism, where he felt he could be more effective in shaping public policy.

The dirty little secret about Britain in particular, and parliaments modeled on Westminster in general, is that they aren’t kind to mavericks and are institutionally structured to keep them down or out. Private consciences cannot be aired easily, if at all. A cri de coeur may have to be embedded in a question on an aside in a debate late at night. It won’t be reflected in a vote when “the whips are on” — party discipline in force. The rare exception is a free vote of the House of Commons on a matter like the death penalty.

Here in the U.S., despite the emasculation that goes with party discipline, the Republicans are well down that road. And one wonders, can the Democrats be far behind?

The dynamic across the aisle is becoming asymmetric, and the only Democratic response will have to be a closing of ranks. Something unique to the American system is being lost here.

The genius of Congress is its ability to hear minority voices and, on occasion, for the administration to make common cause with the opposition — as President Clinton did with the Republicans to pass the North American Free Trade Agreement.

But the Republicans have given up one the great freedoms of our system of government. They have sacrificed on the altar of discipline the special freedom to vote as you see fit.

Sadly the move to party authoritarianism hasn’t come from within the party — although Senate Republican Leader Mitch McConnell, of Kentucky, and House Republican Leader John Boehner, of Ohio, are enjoying it — but from the forces that are shaping conservatism from without.

First among these forces is right-wing broadcasting. It’s a vicious and relentless goad to Republicans to move ever further to right, to embrace positions not of their own making.

Then there’s the party rump, characterized by the Tea Party movement. It’s implacably at odds not just with the administration of Barack Obama but with the times we live in. It yearns for another America in another time. It doesn’t want to face the cultural, demographic and political realities of today. But it’s in tune with the conservative broadcasting colossus, and it will have a large and negative affect on the Republican Party.

Arcing across the political sky, compounding all of this, is the phosphorous rocket of Sarah Palin. The former governor of Alaska may be in the 10th minute of her 15 minutes of fame, but for now she’s a bigger force in Republicanism than are its wiser leaders.

All of this has forced the Republicans in the Senate, and to a lesser extent in the House, to look more like the opposition in a parliament than the minority in Congress. Significantly, we’ve always favored “minority” to describe the other party rather than “opposition.” These words have described the uniqueness of Congress — its authenticity, if you will.

At least until history took a new course in 2010. –For the Hearst-New York Times Syndicate

Filed Under: King's Commentaries Tagged With: British Parliament, Prime Minister's Question Time, Tea Party movement, U.S.Congress

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